The pound/dollar currency pair for the last trading day showed ultra-high volatility of 175 points, the most remarkable – all the volatility of the day went into an upward move. From technical analysis, we see not just a rebound from historic lows, but a literal takeoff. More than 300 points of continuous upward movement, and it's only 2.5 days. Madness, I agree, but it's a fact. The result is that the quote has returned to the peak of the recent corrective movement.
As discussed in the previous review, the market is ideal for speculators, such as jumps, volatility, panic does not happen every day and, of course, all this can be earned. The tactic was as follows: we switch to a smaller timeframe and begin to study the news feed, identifying whole information as early as possible, and believe me, it was, otherwise there would be no movement. Of course, this tactic did not suit everyone, and the advice – sit out the noise outside the market – was also relevant. Considering the trading chart in general terms ((the daily period), we see that when hitting historic lows, the primary trend was a little down and there is a new theory. So, returning the price to the maximums of the previous correction does not bring anything good, since a slowdown in the main trend is visible. The second – to remove the trading chart (D1) and look at the period, the end of 2016 and the beginning of 2017, there was just a similar plot. The quotation approached the historical minimum and went into a phase of widespread stagnation, I think you caught the message, also – the pressure of the information background there was similar.
There was no news background last day, statistics on Britain and the United States were not released, and they were not needed when the entire market was immersed in the information background. Yesterday, the British Parliament, contrary to the calls of the prime minister, supported the idea of postponing Brexit's term if agreement cannot be concluded with the EU by October 31. What can be said about this – this is a stunning defeat for Boris Johnson, 299 opposed the postponement of 327 deputies. Formal approval has now remained in the House of Lords, but we can already say that there will be no hard Brexit this year. Against this background, the British currency continued its growth, forgetting about all the problems that surround the United Kingdom.
In such an unexpected development, Boris Johnson decided not to oppose the passage of a bill to postpone Brexit without a deal with the European Union. In turn, in response to the adoption of the bill, the Prime Minister proposed to the deputies to hold early elections on October 15, to which the leader of the British opposition Labor Party Jeremy Corbyn replied: "We are looking forward to the election because we want to throw away this government." The cohesion of the parliament, in this case, was surprising, and, in principle, Johnson no longer had moved in this fast, but action-packed chess game.
Today, in terms of the economic calendar, we have an ADP report on the level of employment in the United States private sector, where, according to preliminary forecasts, they expect a slowdown from 156K to 149K, which may put local pressure on the US currency. The news is strong and well reflects the upcoming Friday report of the US Department of Labor, but do not forget that the information background is currently running the GBPUSD pair and the ADP report may not be as noticeable as many would like.
US 13: 15 London time – ADP report on the level of employment in the private sector.
Further development
Analyzing the current trading chart, we see that the joy of the pound has no boundaries, the rapid upward move continues its formation, reaching the level of 1.2345. As a rule, in such a panic movement, market participants do not realize that the growth that we see was formed literally from scratch. The hard Brexit is postponed, and the negotiations are delayed for the fourth year. When the passions subside and everyone understands that they were left with nothing but a bunch of problems, the downward movement will again be restored, and since there was a significant overheating of long positions, we will see impulsive jumps in the opposite direction. In turn, speculators are not asleep, since real money is being made, and so, the hype of the kingdom made it possible to ride the rising waves well yesterday, and today the rides continue. The tactics are the same, we study the news line and work ahead of the curve. If you are not confident in your abilities and are not ready to ride, then it is better to sit on the fence at least until Monday.
It is likely to assume that such jumps will remain for some time, wherein the case of overcoming the mark of 1.2350, we can go even higher to 1.2400-1.2450, but as soon as there is a limit to emotions and FOMO reaches the side chapel, a backlash will occur. I expect this development in the next day, perhaps within the levels of 1.2350 or 1.2450 (+/- 30p.). Thus, be ready and operate the optimal trading volume.
Technical analysis
Analyzing the different sectors of timeframes (TF), we see that the indicators at all time intervals signal an upward course, and this is understandable since such a strong inertial course does not allow the indicators to work differently.
Volatility per week / Measurement of volatility: Month; Quarter; Year.
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 5 was built taking into account the time of publication of the article)
The current time volatility is 137 points, which already exceeds the average daily indicator by 45%. Now it all depends on the panic mood and how much more speculators are driving the pound into heaven, I do not exclude the possibility that volatility can still grow.
Nevertheless, we must pay tribute to the information background, the autumn began with stunning volatility, the average figure exceeds the mark of 149 points.
Key levels
Resistance zones: 1.2350**; 1.2430; 1.2500; 1.2620; 1.2770**; 1.2880 (1.2865-1.2880)**.
Support zones: 1.2150**; 1.2000***; 1.1700; 1.1475**.
* Periodic Level
** Range Level
*** The article is built on the principle of conducting a transaction, with daily adjustment.
