From the point of view of a comprehensive analysis, we see an attempt to form another correction, but we got the concentration of trading forces in the same area in the end, where it all started, and now let's talk about the details.
The last trading day had the outlines of a corrective course, where the area of interaction of trading forces 1.1190/1.1240 was taken as a pivot, on the basis of which it was possible to accelerate, but then the price returned. Holding the quote in a downward tact has been dragging on for more than two weeks, which indicates a low rate of price change and uncertainty among market participants in the downward development, which makes it difficult to break the range level of 1.1180.
The uncertainty of market participants in this case is due to the rapid inertial movement of May 18, which inspired buyers to drastically change, but limited them to the 1.1440/1.1500 area, due to which a downward beat arose, which in theory can become a recovery process, relative to inertia, if the quote manages to consolidate below the level of 1.1165. Otherwise, the initial development will lead to the formation of the range 1.1180/1.1440 with a possible expansion of it to the level of 1.1500.
Analyzing the past minute by minute, we can see that the trading week began with a round of long positions that led the quote to the area of 1.1285. Short positions arose already at the start of the US session, and lasted until 17:00 UTC+00 (1.1219), where there was a slowdown and, as a fact, a slight pullback.
In terms of volatility, an acceleration of 59% of the dynamics of Friday is recorded, but in terms of the average daily indicator, there is still a slight slowdown in activity.
Regarding the emotional mood of the market, a rate decline of speculative operations is visible, but this is a temporary phenomenon.
As discussed in the previous review, traders are focused on a downward development in terms of recovery, but for significant changes, the quote needs to consolidate below the level of 1.1165. Otherwise, having a chatter will be delayed for an indefinite period.
Looking at the trading chart in general terms (the daily period), you can see that many are focused on repeating the story of March 10, where there was a sharp price reversal. In this case, the emotional mood of the market does not have such a pronounced panic mood, so if there is a downward movement, it will get a stepwise move.
The news background of the past day contained data on pending home sales in the United States, where there was a jump of + 44.3% in May, which became a kind of catalyst for a positive mood for investors.
The reaction of the dollar was almost instant in terms of strengthening.
It is worth considering that May has become a month of weakening quarantine measures, thus there is a similar picture in many areas.
In terms of informational background, we have public concern about the increasing incidence of COVID-19 virus in the United States, where daily rates are again at an extremely high level. At least 14 U.S. states, amid rising incidence of coronavirus, decided to postpone mitigation of restrictions in connection with COVID-19, suspending or curtailing their plans.
In turn, the head of the Federal Reserve Bank of San Francisco, Mary Daly, in her speech on Monday refused to answer whether new outbreaks of coronavirus in some areas of the country could change her expectations for a gradual recovery.
"It's still not very clear, we are collecting all possible information and consulting with health experts," Mary Daly said at a telephone news conference.
Let me remind you that the head of the Federal Reserve Bank of San Francisco has not yet provided its forecasts on monetary policy, like her colleagues in the Fed.
Today, in terms of the economic calendar, we have preliminary data on inflation in Europe, where if it is confirmed to slow down from 0.1% to 0.0%, the euro will come under pressure, which may provide an incentive for the breakdown of the level of 1.1180.
Further development
Analyzing the current trading chart, we see that a downward spiral of short positions arose at the start of the European session, due to which the quote almost managed to reach the minimum of the variable range of 1.1190/1.1240. The range of 1.1180 is still considered the main obstacle for sellers, but if the price consolidates below 1.1165, everything can change quickly, where the recovery process will not take long.
It can be assumed that market participants aimed at the range level of 1.1180, where depending on the behavior of quotes in the region of 1.1065/1.1190, the course for the coming days will be understood.
Based on the above information, we derive trading recommendations:
- Consider buy deals in the event of a price rebound from the area of 1.1180/1.1190
- Sales deals have already been sent in the direction of 1.1180, which is considered a local perspective.
The main positions will arise after the price consolidates below 1.1165, in a four-hour period.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical instruments in a single rush signal a sale due to the convergence of prices with the region of the range of 1.1180.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the average daily fluctuation calculated for the Month / Quarter / Year.
(June 30 was built taking into account the time of publication of the article)
The volatility of the current time is 47 points, which is already more than half of the daily average. It can be assumed that in the event of a breakdown of the range level 1.1180, we will see a new round of acceleration of volatility.
Key levels
Resistance Zones: 1.1300; 1.1440 / 1.1500; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support Zones: 1.1180; 1.1080 **; 1.1000 ***; 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.
* Periodic level
** Range Level
*** Psychological level
