Welcome in today’s price action setups preview, where we analyze the most interesting currency pairs using PA trading technique. Yesterday there was not too much action on the markets – beside the huge weekend gaps. This was due to Monday which normally is calmer trading day and we cannot forget that UK was celebrating holidays – it is really important market, which generates approx. 40% daily FX volumes. Today British traders are back to normal investing, so there should not be such big gaps.
EUR/CAD
Cross formed a pin bar candle yesterday, which is a buy signal. This is the third test of this level recently, and two previous ones ended with nice profits. There are three ways to play this setup:
- Purchase after breaking above maximum, SL below minimum,
- Purchas after breaking above maximum, SL below 50% retracement of a candle (better RR ratio than in the first case),
- Buy limit at 50% retracement of a candle, SL below minimum. Better RR ratio than in the first case, and safer SL than in the second one. But there is still a risk that market will not correct the price and we will be left without a position in developing trend. Personally, I prefer this method – so I activate buy limit order at 50% retracement of this candle.
EUR/USD
Euro to American dollar noted a 40-pips gap and approached psychological barrier of 1.3220, which was broken afterwards. Trend here is clearly downward and it is hard to consider any long positions here – but if there should be upward correction before testing the 1.3100 key support, it should take place now. In this case it is worth to look for sell signals near 1.3300.
GBP/JPY
Cross rebounded yesterday from really important resistance (172.50). Now we may witness next slumps, breaking even the previous minimum. For the deeper, upward movement the price should firstly test the 169.50 level.
XAU/USD
Gold is still above the key support (1277.00). It is worth to look for Price Action purchase signals, because level is really strong and was tested few times in the last months. There may be a dynamic rebound from it.
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