Market is not quite technical currently – currency pairs are breaking resistance and support zones and do not respect them. Weak Australian data started a lot of confusion on AUD and such up and down movements do not help when it comes to price action. However, I tried to find potential pairs to play today. 3 of them looks really promising – GBP/JPY, NZD/USD and XAU/USD.
Pound sterling versus yen support was dynamically broken yesterday and currently price is testing the level from the bottom. If PA sell signal occurs, we might consider going short – according to yesterday, strong momentum. Support breakout changes in the resistance really often and short position in this case usually has big potential – the next support is localized 300 pips below.
Kiwi rebounded yesterday clearly from key support, forming strong purchase signal – doji bar. Such setup may be played in 3 different ways.
-Buying after breaking maximum, SL below minimum,
– Buying after breaking maximum, SL below 50% of candle’s retracement (better r/r than in the first case where the probability of loss was higher),
– Buy limit (50% candle’s retracement), SL below minimum. 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.
Gold rocketed during yesterday session approaching resistance level. L/t trend is downward, last momentum also, thus clear selling signal from price action might be an opportunity to go short.