Daily Technical Forex Report 08.01.2019

EUR/USD

EUR/USD continued growing and tested the level of resistance/upper boundary of the range 1.1476. The price could not break it out and is currently trading near this mark, therefore, we can consider 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 must be keen and supported by the large volume, which will insure us against a fake breakout. A stop loss should be placed below the breakout volume bar. A potential of the deal is around 120 points.

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

GBP/USD

GBP/USD also grew up and broke out the previous level of resistance yesterday. Nevertheless, the movement was smooth and on the small volume, so it’s too dangerous to open purchases at the moment, because the possibility of the false breakout is quite high.

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

Thus, we can consider long positions only after the resumption of the rise, but the move must be abrupt and supported by the large volume, which will be a more secure and precise signal for entering the market. A stop loss should be placed below the beginning of this growth. A potential of the deal is around 130 points.

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

USD/JPY

Nothing has changed with USD/JPY as the price goes on trading within the local consolidation between the support level 107.28 and the resistance level 109.46. Hence, our previous scenario remains actual: we can open new positions only after the sure and sharp exit of the pair from the consolidation. Moreover, the movement must be supported by the large volume, which will be a more reliable signal for entering the market.

While the price is located inside the range, we’d better stay out of the market.

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

USD/CAD

USD/CAD carried on falling, furthermore, the drop was on the increased volume, which is a good bearish signal. Thus, we should give preference to short positions now. We can enter the market after a smooth upward correction, in order to obtain a more profitable entry point. A stop loss should be placed above the recent abrupt sink. A potential of the deal is around 120 points.

The bottom line: short positions should be in priority.

AUD/USD

AUD/USD continued rising, but the move was smooth and on the small volume, so that we can’t point out any new level or zone. However, given the recent sharp surge on the large volume, we still should give a little advantage to long positions. We can enter the market after a smooth correction of the pair down, in order to get a more profitable entry point. A stop loss should be placed below the beginning of the rise. A potential of the deal is more than 80 points.

The bottom line: long positions should be in priority.

XAU/USD

Gold corrected downwards yesterday, but the fall was on the small volume. Besides it, there is a strong uptrend and the level of support 1277.00, which contains the large volume. Hence, we still should give preference to long positions with this instrument.

(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 surge, but the move must be supported by the large volume, which will be a more secure signal for entering the market. A stop loss should be placed below the support level. A potential of the deal is around 120-130 points.

If the price breaks down the support level, we’d better stay out of the market.

The bottom line: long positions are still in priority.

The mood of retail traders (trading against the "crowd"): the sentiment of the market confirms all our scenarios, except the one with AUD/USD, so we should be more careful with this pair. As with USD/JPY, we should wait for the exit of the pair from the range and only after that we can open new positions.

The best deals: GBP/USD, USD/CAD

Potentially good deals: EUR/USD, AUD/USD, XAU/USD

Stay out of the market: USD/JPY

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