EUR/USD showed a rapid growth yesterday and is currently testing the resistance level/upper limit of the local consolidation 1.1838 – 1.1846. It should be noted that the price growth was on increased volume, which is a good bullish signal. Thus, now it is worth considering the scenario of breakdown of this level, which will allow us to open long positions for this currency pair.
The breakout movement must be sharp, swift and supported by increased/large volume, which will be a more accurate and strong signal for entering the market. Moreover, this will help us to avoid false breakdown.
A stop loss should be placed slightly below the volume breakout bar. The potential of the deal is about 90-100 points.
The situation for the Pound remained the same as this currency pair is locked in the local consolidation between two strong volume levels: the support 1.3318 and the resistance 1.3544. Also we should point out that large volume is concentrated in this range, so the exit of the pair from this consolidation will be a great signal for entering the market.
The breakout movement must be abrupt and supported by large volume, so it will be a more reliable and accurate signal for opening new deals. Also it is necessary in order to avoid fake breakouts.
While the pair is in consolidation, we should stay out of the market.
The Yen grew up and broke our the resistance level. Unfortunately, the movement was on small volume, so that we can’t consider it as the strong bullish signal. Moreover, the pair is locked in the local consolidation 112.08 – 113.65, so the scenario of trading is quite simple – we should wait for the exit of the pair from the range. The move must be abrupt and on increased volume, so it will be a more reliable sign.
The Price had tested the resistance 1.2906, but failed to break it out. Now the pair is located a little bit below this level, so the absence of the strong rebound is a signal that big player still want to breakout this level. It will be a great bullish signal for us.
The breakout movement should be confident and sharp + supported by large volume. A stop loss should be placed below the breakout volume bar. A potential of the deal is 150+ pips.
AUD/USD is still located in the local consolidation a little bit above the level of support 0.7614 – 0.7626, so our previous scenario remains the same: until its breakout we should give preference to long positions.
We can enter the market after a resumption of the growth and the breakout of the local maximum. A stop loss should be placed below the beginning of the abrupt growth. A potential of the deal is 60-70 pips.
Gold continued its smooth growth yesterday, moreover, the move was on small volume, so that we can’t consider it as a good situation for entering the market. On the other hand, the breakout of the previous resistance is a good bullish signal, that’s why we still should give advantage to long positions.
We can enter the market after the resumption of the growth on large volume, perfectly, if the price corrects down a little bit and then starts growing. A stop loss should be placed below the beginning of the abrupt upward movement. A potential of the deal is more than 120 pips.
The sentiment: as can be seen from the chart below, for all currency pairs long positions should be in priority. Only for gold this indicator shows equal value.
The bottom line: the situation on the market is still tough as almost all currency pairs are located in consolidations.