EUR/USD continued falling and now is testing the global support level 1.0669 – 1.0684. We need to point out that the fall of the price was on increased volume which makes the breakout of the support pretty possible scenario.
As can be seen from the chart above, there is a strong accumulation of volume at the top, which also put a pressure on the price. Given all these facts, short positions are in priority now. We can sell the euro after a strong volumetric breakdown of the support with further fixation of the price below it. Stop loss should be set above the breakout bar. The target is 1.0550.
We need to highlight a new level of resistance for the pound – 1.2502 – 1.2522 where high volume is concentrated. This level stopped the growth of the price on Thursday and now the price is trading below it.
Given the whole situation on the market, where the US dollar strengthen it’s better to consider short positions for GBP/USD + volume during the growth of the price was at the top of the bar, so it seems like the market just wanted to take off stop losses and now is looking to go down again.
Short positions can be opened after the test of the resistance and the rebound of the price on large volume. Stop loss should be set above the level with a little margin. The target is 1.2338.
The yen grew up on increased volume on Thursday, but unfortunately we are unable to point out any new volumetric level or zone which can be used for trading. Yes, probably the price will go up further, but we don’t have a good place for stop loss, so I advise to remove this instrument from today’s trading plan.
If you are trading with your own system, I advise to consider only long positions now.
USD/CAD had tested its support level but failed to break it down and now is trading in the consolidation again. Unfortunately, before the price come out of the consolidation, I advise not to trade it. We have strengthening US dollar and a growth of oil price, so it’s 50/50 situation which is better to skip from trading.
AUD/USD is still trading in the consolidation, but here we can highlight a possible scenario of trading: the price resuming its fall and breaks down the support level 0.7610 on increased volume which is a good signal for opening short positions. Stop loss should be set above the breakout volumetric bar. The target is 0.7520.
Gold continued its correction and is trading near an important support level of 1239.60 – 1242.60 now. It should be noted that the price fall was on increased volume and there is a general tendency for strengthening the US dollar on the market, which only increases the probability of further falling of the precious metal.
There is a large accumulation of volume at the top of the chart, which only strengthens the value and potential of the fall in case of a breakdown of the level of support. Thus, now it is better to work from the breakdown of this mark and open short positions.
We can enter the market after a strong and confident breakdown of the level 1239.60 – 1242.60 with further fixation of the price below this mark. The breakdown must be on large volume! Stop loss should be placed above a volumetric breakdown bar. The first target is 1224.00, the second – 1210.00. The risk/profit ratio is at least 1 to 2, which makes this scenario very profitable for us.
Sentiment: as you can see from the diagram below the market is reversing now and many traders go from long positions to short. So we just need to watch for further changes of the sentiment of the market.
The bottom line: the euro and gold have the best situations for trading. The pound also have a potentially good deal.