Today is the first Friday of the month, thus market awaits the most important data from US labor market (unemployment and NFP). We have to be very careful, because during these reading markets are highly volatile, liquidity is limited and our stop loss may be closed after a lot worse exchange rate than they were set. Event long-term players with defense levels of several dozen pips may be unpleasantly surprised. Therefore, it is not worth to open positions just before the data. Of course after the reading we should look for many markets opportunities – especially key levels challenges and tests. Let’s start today’s potential price action setups preview:
AUD/USD:
Aussie fell below the support and now price should reach the next important level. Bear took the control over the currency pair, thus it is worth to look for short position – after resistance (earlier support) re-challenge. Of course to do it we need a proper sell signal from Price Action.
EUR/JPY:
Cross tests resistance. Yesterday a really nice doji bar formed, which gave a sell signal. Traders using lower timeframes probably have opened short positions. We have free different ways to enter a market here:
-Selling after breaking minimum, SL above maximum,
– Selling after breaking minimum, SL above 50% of candle’s retracement (better r/r than in the first case where the probability of loss was higher),
– Sell limit (50% candle’s retracement), SL above maximum. Better r/r 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 without position, just observing the developing trend. However the last one is my favorite way.
GBP/USD:
Cable broke below important support line (which now should act as a resistance). The momentum is also downward and we should look for sell signals – but earlier let’s wait for level re-test from the bottom. It has to be remembered, that long-term trend is upward one and short positions are played against it.
USD/JPY:
Ninja acted by the book. Broke the resistance, tested it from the top, confirmed the momentum change and now is increasing. First goal for long positions should be the next resistance. It is worth to add, that H4 chart generated pin-bar candles which were purchase signals (SL for such positions around 10 pips).
