We are on the verge of large-scale acceleration. So, how not to miss the entry point and what are the prospects? The answer to this question can be found in the article.
From the point of view of complex analysis, we see an extremely strong deceleration within the psychological level of 1.3000, where the amplitude of the oscillation has clamped to the lowest rates in recent years. In fact, the signal of the upcoming acceleration has already been received, and thus, the most difficult stage has come - the waiting. If we refer to previous periods of price interaction with a control level, we will see that the current moment is distinguished by a high speculative expectation coefficient, together with general market tightening, which fuels the interest of market participants in the upcoming rally.
Regarding the theory of the Zigzag-shaped model, we are in the final phase of deceleration, with a probability of 90%, where the previous bars are considered complete, and the quote has switched to the mode of accumulating trading volumes. Confirmation of this judgment comes from the fact that the external background does not affect the quote, which continues to stand still, without any fundamental changes. At the same time, most experts are inclined to believe that we have a turning point in the Z-model, which will lead to changes in the medium-term upward trend.
In terms of volatility, we see a very rare phenomenon that occurs on the GBP / USD pair several times a year. So, the amplitude of the fluctuation of the past day was 39 points, which is unacceptable for such a dynamic pair. As examples, we take the day before Christmas [12/24/19], where European markets were already closed, and the United States had a shortened session, and so, under such circumstances, the volatility of the day was 48 points. Now, the volatility is 39 points when we have a strong background and active markets. In fact, this is another confirmation of the impending acceleration.
Detailing the past minute by minute, we see the next V-shaped oscillation, as it was the day before, with only one remark, the oscillation is half as much [Max - 1.3027; Min - 1.2988].
As discussed in the previous review, traders do not seek hasty actions and do not enter the market with respect to the available values, which is a right step. At the same time, everyone is at a low start, as the breakdown of accumulation should come very soon.
Considering the trading chart in general terms [the daily period], we see another attempt to break the medium-term upward trend, where the compression of the amplitude over the past six weeks seems to prepare market participants for dramatic changes.
On the other hand, the news background of the past day was probably one of the most important events in the financial world, a meeting of the Federal Reserve System, where the regulator masterfully turned all the formulations of monetary policy so that he did not answer a single life-saving question, but what next? The only thing that became clear is that the Fed does not plan to take drastic actions and the rate remains unchanged.
In turn, the reaction of the market to an event of such high importance was fascinating, since it was absent in the literal and figurative sense, where market participants remained in a kind of daze.
In terms of the general informational background, we have a finish in terms of ratification of the Brexit agreement, where the European Parliament put an end to and almost unanimously voted in favor of the agreement [631 members of parliament voted FOR, against, 49, 13 abstained] yesterday.
As the head of the European Commission, Ursula von der Leyen, stated, this is only the first step towards a new kind of partnership between the EU and the UK, which is simply impossible to disagree with, as the titanic work is still ahead, as the risks of failure.
Today, the main event of the day is the meeting of the Bank of England, which is the last for its head Mark Carney. The most exciting moment of the meeting is the decision on the interest rate, where due to the escalating fear from the media there are suggestions of a possible reduction. It is worth considering that the Bank of England plans to reduce the rate, but it was not a speedy decision regarding the approval of Brexit. If we refer to futures on the rate, then a reduction at this meeting is not planned.
Given the strong market tension, this event could be a catalyst for speculators.
12:00 Universal time, interest rate decision
12:30 Universal time, Speech by the head of the Bank of England Carney
Further development
Analyzing the current trading chart, we see the ongoing process of accumulation, the amplitude of which occurs along the psychological level of 1.3000. In fact, the quote has been standing in one place for several days, and this cannot but attention attention. Thus, acceleration will occur with a probability of 100%, and here the role of the direction will no longer play, although in terms of technical data, as well as fundamental, it would be most logical to see a restoration of the downward trend.
From the point of view of the emotional mood of the market, we see a huge flow of people wishing to break into the market, where, with the slightest change in trading forces, a surge of activity will occur, followed by inertial movement.
By detailing the per minute portion of time, we see an oscillation in the range of 1.2974 / 1.3026, where the boundaries are conditionally variable points. At the same time, there was a local surge in short positions within the accumulation range at the start of the European trading session.
In turn, traders are waiting for the breakdown of accumulation, focusing on the values of 1.2960 and 1.3040.
Having a general picture of the actions, it is possible to assume that the acceleration will come today against the background of a sharp slowdown of the past day, as well as increasing market tension. Moreover, the theory of the Zigzag-shaped model will greatly help us in this, which will be completely broken through at this moment. Meanwhile, trading tactics were selected by the method of breakdown of key values in the face of 1.2960 for sale and 1.3040 for purchase. Thus, it is worth considering that long positions are considered as local, without significant retention in any outcome.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in case of a sharp change in trading interests and price fixing higher than 1.3040-45.
- Sales positions are the main transactions where traders are waiting for a clear price fixing lower than 1.2960.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators of technical instruments are rapidly directed downward, having a sell signal, which confirms the general market background.
Volatility per week / Measurement of volatility: Month; Quarter Year
Measurement of volatility reflects the average daily fluctuation, calculated for Month / Quarter / Year.
(January 30 was built taking into account the time of publication of the article)
The current time volatility is 47 points, which is already more than the amplitude of the past day. It is likely to assume that the market spring has shrunk to the limit and acceleration awaits us at the earliest possible time.
Key levels
Resistance Zones: 1.3000; 1.3180 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 1.3000; 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 built on the principle of conducting a transaction, with daily adjustment
