Having opened with a gap after the weekend, EUR/USD had continued its growth up to the American session when it corrected after an appearance of bid deltas. Volume during the correction was not large enough to consider a market reversal or a possibility to sell the instrument.
Also, the level 1.0795 – 1.0816 remains important, large volume is concentrated in it and which should be considered as a place for a stop loss.
As can be seen from the chart above very large and, the most important, fresh accumulation of volume is concentrated at the bottom, so it is worthwhile to consider only long positions before a breakout of this volumetric zone.
Long positions should be opened only in case of a favorable price: we are waiting for further price correction, approximately, to the level 1.0825 – 1.0830 after which it is possible to enter the market. Stop loss should be set below the level 1.0760, an alternative option for stop loss is 1.0784 (more risky). It is important that the correction would be on small scale.
The first goal is a local maximum, after reaching it a stop loss should be moved to the breakeven. Then it is possible to hold the deal until the appearance of reversal signal.
GBP/USD also continued its growth from the level of support 1.2430 – 1.2353. There was a little correction of the price during the American session, but it was on small volume, so we can’t consider the reverse of the market.
That’s why we need to consider only long positions. But unfortunately, the price is now too far away from the level of support that is a good place for a stop loss, so we can’t enter the market now. It is necessary to wait for a correction of the price on small volume, approximately, to the level 1.2500 after that purchases can be opened. Stop loss should be set below the level 1.2430. A potential of the deal is about 150 pips.
USD/JPY has already broken down the level of support 110.75 which confirms that the price plans to continues its fall. But the breakdown was on small volume, so we can’t put our stop loss above it. The safest place for it is the level 111.55, so we can’t enter the market from the current level, because a stop loss will be too big. We need to wait for a correction of the price and then open short positions. A potential of the fall is really big – around 200 pips.
USD/CAD remains trading inside its consolidation, the only thing that is necessary to highlight is a new level of resistance – 1.3387 – 1.3404 which was tested on Monday.
So the situation remains the same as last week: we have two week currencies, so it’s better just remove this pair from our trading plan until the situation becomes clearer.
We need to highlight a new level of support that does not let the price to continue falling. It is the level 0.7610. Of course, we can consider the opening of short positions after the breakout of this level, but the overall situation is pretty complicated: yes, oil put a pressure on AUD, but the US dollar is very weak too, so it’s not the best idea to buy it. So I also advise to stay out of the market for AUD/USD.
After the appearance of increased volume on local maximum, gold corrected down and now is trading near the level where the price was after the weekend. The support level 1239.60 – 1242.60 is still actual, it is especially good for putting out stop losses below it.
As you can see from the chart above now it is not the best moment to enter the market, because a stop loss will be very big. The scenario of trading gold is quite simple: we need to wait for further correction of the price, approximately, to the level 1248.00 and the stoppage of the fall enter the market. Stop loss should be set below the level 1240.00. The target is the local maximum. If the price breaks it out and continues growing, we can move our stop loss to the breakeven and hold the position until the appearance of a reversal signal.
Sentiment: the mood of the market is still on our side; all positions are confirmed.
The bottom line: USD/JPY has the most real situation for trading now. For the euro, the pound and gold we need to wait for corrections to get the best point for enter the market.