Daily Technical Forex Report 21.01.2019

EUR/USD

EUR/USD went on falling on the increased volume on Friday, however, the price is still within the local range between 2 strong levels. They are the support 1.1267 and the resistance 1.1585. It is also worth highlighting the presence of the large volume accumulation in 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 deals only after a confident and rapid exit of the price from the consolidation. The breakout movement must be supported by the large volume, which will be a more accurate and strong signal to enter the market.

The bottom line: new positions only after the exit of the pair from the range.

GBP/USD

GBP/USD indicated a significant and rapid fall, but the movement was on the small volume, so we cannot consider the scenario of opening short positions. Moreover, the price is trading within the local range between the support level 1.2697 and the resistance level 1.2995.

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

Hence, we can regard new positions with this pair only after a confident and abrupt exit of the price from the consolidation. The movement should be supported by the large volume, which will insure us against a false breakout.

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

USD/JPY

USD/JPY demonstrated an abrupt surge of the pair on the increased volume and broke out the previous resistance level on Friday. This is an excellent bullish signal, so we should give preference to long positions. Purchases should be opened after a small price correction down, in order to get a better entry point. A stop loss should be placed slightly below the start of the breakout volume bar. The potential of the deal is more than 100 points.

The bottom line: long positions after a smooth downward correction of the price.

USD/CAD

USD/CAD did not show any significant movements on Friday and continues trading within the local range between 2 strong levels. They are the support 1.3183 and the resistance 1.3322. Thus, we should wait for a confident exit of the price from the consolidation and only after that we can open new positions. Moreover, this movement should be supported by the large volume, which will be a more accurate signal to enter the market.

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

AUD/USD

AUD/USD is also locked inside the local consolidation, in which the large volume is concentrated. The borders of the range are the support 0.7117 and the resistance 0.7235. Considering these factors, we can regard new positions only after a rapid exit from this consolidation. The breakout movement should be supported by the large volume, which will be a more reliable signal to enter the market.

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

XAU/USD

XAU/USD demonstrated a keen sink and is currently testing the level of support/lower boundary of the local consolidation 1280.00. Given that the movement was on the large volume, we can consider a scenario of the breakdown of this mark, which will be an excellent bearish signal.

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

The drop of the price should be abrupt and on the large volume, which will insure us against a false breakdown. A stop loss should be placed slightly above the breakout volume bar. The potential of the deal is more than 150 points.

The bottom line: short positions after the confident breakdown of the support.

The mood of retail traders (trading against the "crowd"): the sentiment confirms our scenario of opening long positions with the Yen (trading against the “crowd”). With gold, the situation is the opposite, so we should be more careful. As with other instruments, we can consider new deals only after a confident exit of prices from consolidations.

The best deal: USD/JPY

A potentially good deal: XAU/USD

Stay out of the market: EUR/USD, GBP/USD, USD/CAD, AUD/USD

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