Markets yesterday was fighting with the information of FEDs assets purchase tapering. Mainly, the Eurodollar suffered, which dived quite rapidly. Also there is a lack of another important data for which investors could wait.
Let’s start today review of potential Price Action setups:
AUD/NZD:
Currency pair approaches the resistance where you can look for PA sell signals, to trade in accordance with the prevailing downward trend.
CAD/JPY
Cross is defending the support. The last to daily candles may be considered as strong demand signals around 90.80. Breaking the 91.365 will give a buy confirmation – then we can count on a strong correction. The trend is however downward and we have to act carefully.
EUR/USD:
Donward scenario come true. Price broke slightly the resistance at 1.3830 and fell down. Currently there is only one valid direction: south. Another resistance challenge from the bottom will be a good opportunity to open short positions.
GBP/AUD:
Pair falls after local resistance test. The next support is around 100 pips lower. Closing below the 1.8000 will be the sign of a larger downward trend beginning.
GBP/CAD:
An old saying teaches: “when something does not want to grow it will definitely fall”. Despite the weakness of the Canadian dollar, currency pair with pound cannot break the resistance and tested it already 15 times on the D1! Yesterday’s session formed a pin bar and sell signal which can be played in 3 different ways:
-Selling after breaking the minimum, stop loss above the maximum,
– Selling after breaking the minimum, stop loss above 50% of the candle abolition (better profit-to-risk ratio than in the first case where the likelihood of loss was greater),
– Sell limit at 50% of the candle abolition, SL above the maximum. Better profit-to-risk ratio than in the first case and safer SL than in the second one. But there is still a risk, that there will not be a correction and we will be left behind without the position. It should also be borne in mind that a sell signal from the last month is still valid and if someone opened short position then it still may be active and the swap is advantageous for short positions.
GBP/USD:
Cable rate clearly slipped and now we should look only for short positions – if there will be any upward correction.
