The Euro could not continue growing and the price corrected down strongly. Overall, the pair is located in the local consolidation 1.1728 – 1.1816. As can be seen from the chart below, quite large volume accumulation is located in this range, so that the exit of the price from it will be a good signal for entering the market.
The breakout movement must be confident and sharp. Also it should be supported by large volume, which will make the signal stronger for us and more safe. While the pair is locked between these two levels, it is better to stay out of the market.
The Pound grew up yesterday, but it did not change anything as the price is still locked in the global consolidation, where large volume is concentrated. It gives us an opportunity to admit that big players are gaining positions inside this consolidation.
That’s why the best decision will be wait for the price to come out from the range on large volume in order to avoid false breakout. Moreover, it will be a more accurate and strong signal.
After the test of the global support level 111.73 – 111.86, the price showed a significant upward correction. We should note that despite the fact that this move was quite sharp, it was on small volume, so we should consider it as a reversal signal. So short positions are still in priority.
We can enter the market after a resumption of the fall and the breakdown of the support on large volume. A stop loss should be placed above the breakout volume bar. A potential of the deal is more than 120 points.
USD/CAD resumed its growth on Monday and tested the resistance level/upper limit of the consolidation 1.2821. The movement was quite smooth and on average volume, however the price did not show a significant reaction to the resistance and remained trading near this mark. This signal indicates that the probability of a breakout of this level is quite high, which allows us to consider the scenario of opening long positions for this currency pair.
Purchases can be opened after a confident and sharp breakout of the level 1.2821 on increased/large volume to avoid a false breakdown. In addition, this signal will be more accurate and strong, which will enable us to enter the market. A stop loss should be placed under the breakout volume bar. The price growth potential is 120 points.
The Australian dollar is trading in the little local consolidation near the local low, so here nothing has changed and our previous scenario remains the same: we should give preference to short positions. We can enter the market after a resumption of the fall of the price on increased volume. A stop loss should be placed above the level 0.7575. A potential of the deal is 80 points.
After the breakout of the upper limit of the range on Friday, the price fell down incredibly strong yesterday, so the price returned trading in the consolidation. Also we need to correct the upper limit of the range, now it is the level 1292.50, while the lower one is the same – 1264.40 – 1266.00.
Beside it, we should note that large volume is concentrated in this consolidation, so the exit of the price from the consolidation will be an excellent signal for entering the market.
The breakout movement must be keen and abrupt, while volume during it must be at least increased, perfectly – large. It will secure us from the false breakouts.
Until that, it is better to stay out of the market.
The sentiment: our scenarios for USD/JPY, USD/CAD and AUD/USD are confirmed by this indicator, while for 3 other instruments it does not matter as they are in ranges.
The bottom line: the situation on the market became more complicated as almost all instruments corrected and many of them are located in local/global ranges. That’s why we should be extremely careful.