Using complex analysis, we can see the continuing downward interest, which led us to the breaking down of the psychological level of 1.3000 by the sellers. The characteristic pressure within 1.3000 haunted market participants for about four weeks, where the concentration of trading forces was off the scale, and the breakdown of the boundaries did not occur. The repeated rebound from the control value led to the fact that the initial amplitude was compressed at times, and the quote was increasingly concentrated at the level, as if issuing a mental signal of an early change in the trading forces. Now, the quote has managed to fix below the area of the psychological level of 1.3000 [1.2960 // 1.3000 // 1.3055] in the H4 period. If we make a more detailed analysis, we will see that the existing fluctuation since December 23 last year fixed the quote lower than 1.2960, which means that there is still a chance of restoring the downward trend. I do not want to give unjustified hopes in advance, so I would advise not to go too far with the volumes of the downward, but see first the breakdown of the 1.2900 [1,2904] mark, which reflects the first attempt of breaking the upward interest.
In terms of volatility, we see a sharp decline, which reflects the breakdown of the psychological level of 1.3000.
Volatility details: Thursday-131 points; Friday-125 points; Monday-215 points; Tuesday-105 points; Wednesday-112 points; Thursday-79 points. The average daily indicator, relative to the volatility dynamics, is 95 points [see the volatility table at the end of the article].
Detailing the past day by the minute, we see that after the accumulation within the level of 1.3000, there was a characteristic exit in the area of 11:30, where a local decline was set. The subsequent fluctuation after the consolidation was in terms of a narrow flat.
As discussed in the previous review , the speculators are not the only ones happy now, but also all traders who finally saw the price fixing lower than 1.2960 [H4].
Looking at the trading chart in general terms [the daily period], we see a medium-term upward movement that originated in early September. The conditional peak of this move was reflected in the market in the form of a slowdown, where the psychological level of 1.3000 is the lower limit.
Yesterday's news background included data on the applications for unemployment benefits in the United States. Initial applications decreased by 15 thousand, while repeated applications increased by 48 thousand The growth forecast for them is a decrease of 8 thousand.
The market reaction was almost absent, as the dollar received almost no pressure, and resumed strengthening.
All in all, we did not notice any sharp bursts of activity in the media over the past day. Discussions on the coronavirus, as well as the upcoming negotiations between England and Brussels put local pressure on the opinion of market participants. However, this is just as a general background, not anything else. At the same time, the completion of Donal Trump's impeachment, as well as the improvement of US-China trade relations, affected the global distribution of risks, and had a positive effect on the mood of the investors.
Today, in terms of the economic calendar, we have a report from the US Department of Labor. Thus. following the ADP report, employment is growing stronger than expected, so the existing forecasts for the report may not match. Instead of creating 160 thousand jobs, we may see something more that will affect the forecasts for the unemployment rate.
In the economic calendar, although the preliminary data on UK GDP will be released, where a slowdown is expected, the highlight of the upcoming trading week is the data of inflation in the United States.
The most interesting events are displayed below - - ->
Tuesday, February 11
UK 10:30 London time- Preliminary GDP data: PREV. 1.1% - - -> Forecast 1.0%
UK 10:30 London time - Industrial production (yoy) (Dec): PREV. -1.6% - - -> Forecast -2.2%
USA 16:00 London time - The number of open vacancies in the labor market (JOLTS):
PREV. 6,800 M - - -> Forecast -7,233 M
Thursday, February 13
US 14:30 London time - Basic consumer price index: PREV. 2.3% - - -> Forecast 2.2%
Friday, February 14
US 14:30 London time - Volume of retail sales
US 14:30 London time - Industrial output
Further development
Analyzing the current trading chart, we see an extremely weak amplitude fluctuation within the values of 1.2920 / 1.2945, where the quote seems to gradually accumulate trading volumes, which will lead to a subsequent movement. In fact, this can be a great platform for acceleration, and will definitely attract the attention of speculators. Meanwhile, regarding global steps, we need to fix the price below 1.2900, so that the confidence of sellers will be more pronounced.
As for the emotional mood of the market participants, the coefficient of speculative positions is still high, which may lead to a new acceleration of volatility.
By detailing a minute-by-minute section of time, we see a narrow amplitude fluctuation, which is atypical for this section of time, and indicates the upcoming activity.
The subsequent gulf is expected to be lower than 1.2900, so speculators adhere to the tactics of working on jumps with market entry.
All in all, it is possible to assume that the existing stagnation will not last long. Moreover, the breakdown of the boundaries of 1.2920 / 1.2945 can bring significant income in terms of speculative positions. The main transactions will be made after the price is fixed below 1.2900.
Based on the above information, we will display the following trading recommendations:
- Consider buy positions if the price fixes above 1.3045, and the local move to 1.2960 is 1.2995
- Positions for sale are already being held by traders, and the subsequent fill will occur after the price fixes below 1.2900.
Indicator analysis
Analyzing the different sectors of timeframes (TF), we see that the indicators of the technical instruments are signalling sales. However, is worth considering that the minute sections are now in accumulation, so the signal is unstable.
Volatility for the week / Volatility measurement: Month; Quarter year
The volatility measurement reflects the average daily fluctuation, based on the calculation for the Month / Quarter / Year.
(February 7 was based on the time of publication of the article)
The current volatility is 25 points, which is an extremely low value for this section of time (!!!). It is likely to assume that today, we will see an acceleration similar to that of the past days, before slowing down.
Key level
Resistance zones: 1,3000; 1,3170**; 1,3300**; 1,3600; 1,3850; 1,4000***; 1,4350**.
Support areas: 1,2900*; 1,2885*; 1,2770**; 1,2700*; 1,2620; 1,2580*; 1,2500**; 1,2350**; 1,2205(+/- 10p.)*; 1,2150**; 1,2000***; 1,1700; 1,1475**.
* Periodic level
** Range level
***Psychological level
**** The article is based on the principle of conducting a transaction, with daily adjustments
