Daily Technical Forex Report 07.01.2019

EUR/USD

EUR/USD continues trading within the local consolidation between 2 strong volume levels. The first one is the support 1.1267, the second one is the resistance 1.1463. Besides it, the large volume is concentrated inside this range.  

(this is a futures chart, so the price here differs from the Forex, but it moves totally the same)

Given all these factors, we can consider new positions only after the sure and abrupt exit of the pair from this consolidation. The movement must be supported by the large volume, which will be a more precise and secure signal for entering the market.

While the pair is located within the consolidation, we’d better stay out of the market.

The bottom line: waiting for the exit of the price from the range.

GBP/USD

GBP/USD grew up sharply and on the large volume on Friday. The price is currently trading near the level of resistance/upper limit of the local consolidation 1.2750. Therefore, we can and should regard a scenario of its breakout, which will be a great bullish signal.

(this is a futures chart, so the price here differs from the Forex, but it moves totally the same)

The surge should be keen and supported by the large volume, which will be a more reliable and accurate signal for entering the market. A stop loss should be placed below the breakout volume bar. A potential of the deal is around 130 points.  

The bottom line: long positions after the sure breakout of the resistance.

USD/JPY

USD/JPY went on correction upwards and now the pair is located in the middle of the local consolidation between 2 strong levels. They are the support 107.28 and the resistance 109.46. Thus, the best solution with this instrument is just to wait for the confident and sharp exit of the price from this range. The move must be supported by the large volume, which will be a more reliable signal for entering the market and will insure us against a fake breakout.

While the price is locked within the consolidation, we’d better skip this pair from our trading plan.

The bottom line: new positions only after the exit of the price from the consolidation.

USD/CAD

USD/CAD showed an abrupt drop on the large volume on Friday, which is a great bearish signal. So now we should give preference to short positions with this pair. We can enter the market after a smooth upward correction of the price, in order to get a more profitable entry point. A stop loss should be placed above the beginning of the sharp fall. A potential of the deal is around 120 points.  

The bottom line: short positions should be in priority.

AUD/USD

AUD/USD indicated a sharp rise and broke out the previous resistance level. The movement was supported by the large volume, which is a good bullish signal. Therefore, we should give advantage to long positions. We can enter the market after a smooth downward correction of the price, in order to obtain a better entry point. A stop loss should be placed below the breakout volume bar. A potential of the deal is more than 80 points.

The bottom line: long positions should be in priority.

XAU/USD

Gold fell down strongly and on the large volume, but the move was stopped by the creation of the new support level 1277.00. Besides it, there is a global uptrend with gold, hence, we still should give a slight preference to long positions.

(this is a futures chart, so the price here differs from the Forex, but it moves totally the same)

We can enter the market after a resumption of the keen rise, but the move should be supported by the large volume, which will be a more reliable signal for entering the market. A stop loss should be placed below the support level. A potential of the deal is around 130-140 points.

If the price carries on falling and breaks down the support, we’d better stay out of the market.  

The bottom line: long positions after a resumption of the sharp growth.

The mood of retail traders (trading against the "crowd"): this indicator confirms our trading scenarios with GBP/USD, USD/CAD and XAU/USD, which is a good additional signal. As with AUD/USD, the situation is contradictory, hence, we should be more careful. As with other instruments, we should wait for the exit of prices from ranges and only after that we can open new positions.

Potentially good deals: GBP/USD, USD/CAD, AUD/USD, XAU/USD

Stay out of the market: EUR/USD, USD/JPY

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