Daily Technical Forex Report 22.01.2019

EUR/USD

EUR/USD endured falling yesterday, but the dip was smooth and on the small volume, so that we can’t point out any new volume level or zone. Moreover, the price is located within the local consolidation between the support 1.1267 and the resistance 1.1585. The large volume is concentrated within this range.

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

Considering all these factors, we can open new positions only after the confident and sharp exit of the price from the local consolidation. The breakout movement must be supported by the large volume, which will be a more reliable and accurate signal for entering the market.

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

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

GBP/USD

GBP/USD continues trading within the local consolidation between the level of support 1.2697 and the level of resistance 1.2995. We also should point out that the large volume is concentrated inside this local range.

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

Therefore, we can enter the market and open new deals only after the sure and abrupt exit of the price from the local consolidation. Furthermore, the movement must be supported by the large volume, which will be a more precise and secure signal for entering the market.

Until that, we’d better stay out of the market.

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

USD/JPY

USD/JPY corrected downwards yesterday, but the fall was on the small volume, so that we can’t consider short positions. Given the recent sharp rise and the breakout of the resistance, we still should give a slight preference to long positions. We can enter the market after a resumption of the abrupt surge, but the move was on the large volume, which will be a more reliable signal for entering the market. A stop loss should be placed below the beginning of this move. A potential of the deal is more than 100 points.

The bottom line: long positions are still in priority.

USD/CAD

USD/CAD showed a confident and significant move yesterday. The price is currently testing the level of resistance/upper limit of the local range 1.3322. Hence, we can and should consider a scenario of its breakout, which will be a great bullish signal. The rise must 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 breakout volume bar. A potential of the deal is around 130 points.  

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

AUD/USD

AUD/USD demonstrated a sharp fall and now the pair is located near the level of support/lower limit of the local consolidation 0.7117. Thus, we can consider a scenario of its breakdown, which will allow us to open short positions. The drop of the price must be supported by the large volume, which will be a more secure signal for entering the market. A stop loss should be placed above the breakdown volume bar. A potential of the deal is more than 80 points.

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

XAU/USD

XAU/USD fell down and broke down the previous support level, which is a good bearish signal. Unfortunately, the sink of the price was on the small volume, so that it’s a bit risky to enter the market right now.

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

Therefore, we can open short positions after a continuation of the fall, but the movement must be supported by the large volume, which will be a more reliable signal for entering the market. A stop loss should be placed above the beginning of this dip. A potential of the deal is more than 150 points.

The bottom line: short positions are still in priority.

The mood of retail traders (trading against the "crowd"): this indicator affirms our scenarios with USD/JPY and AUD/USD, which is a good additional signal. The opposite situation with USD/CAD and XAU/USD, so we should be more careful. As with other instruments, we should wait for the exit of pairs from local consolidations and only then we can open new positions.  

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

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

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