Daily Technical Forex Report 25.01.2019

EUR/USD

EUR/USD showed a sharp fall on the huge volume yesterday, which is a great bearish signal. Moreover, the price is trading nigh the level of support/lower limit of the local consolidation 1.1267. Hence, we can and should consider a scenario of its breakdown, which will allow us to open short positions.

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

The drop of the pair must 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 above the breakdown volume bar. A potential of the deal is more than 100 points.

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

GBP/USD

GBP/USD demonstrated an abrupt rise. We also should point out the new level of support 1.3024, which contains the large volume. So given all these factors, we should prefer a scenario of opening long positions with this pair.

(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 smooth downward correction of the price, in order to get a more profitable entry point. A stop loss should be placed below the support level. A potential of the deal is more than 120 points.

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

USD/JPY

USD/JPY is still located inside the local consolidation between the level of support 109.15 and the level of resistance 109.92. Therefore, we can consider new positions only after the sure and abrupt exit of the price from the local range. The movement must be supported by the large volume, which will insure us against a fake breakout.

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

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

USD/CAD

USD/CAD tested the level of resistance 1.3367 and then corrected down. Nevertheless, the price is still trading near this mark, hence, we can consider its breakout, which will allow us to open long positions. The surge must be sharp and supported by the large volume, that will be a more secure signal for entering the market. 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.

AUD/USD

AUD/USD corrected upwards yesterday, but the rise was smooth and on the small volume, so that we can’t consider it as a reversal signal. Thus, given the recent sharp drop, we should prefer a scenario of opening short positions. We can enter the market after a resumption of the drop, but the move must be supported by the large volume. A stop loss should be placed above the beginning of this move. A potential of the deal is more than 80 points.

The bottom line: short positions are still in priority.

XAU/USD

XAU/USD tested the level of support/lower boundary of the local consolidation. The price could not break it down, on the other hand, it is still located near this mark. Therefore, we can consider a scenario of its breakdown, which will be a great bearish signal.

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

The fall of the price must be abrupt and supported by the large volume, which will insure us against a fake breakdown. A stop loss should be placed above the breakdown volume bar. A potential of the deal is more than 150 points.

The bottom line: sales after the sharp breakdown of the support.

The mood of retail traders (trading against the "crowd"): this indicator confirms all our trading scenarios today, which is a great additional signal for us. The only exception is gold, so we should wait for the appearance of the strong confirming signal. As with the Yen, we must wait for the exit of the price from the local range and only then we can open new positions. 

The best deals: EUR/USD, GBP/USD

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

Stay out of the market: USD/JPY

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