Over the past trading day, the pound / dollar currency pair showed volatility close to the average daily point of 92 points, resulting in a very interesting amplitude. From the point of view of technical analysis, we find that the quotation found a foothold in the face of the value 1.2200 after a pulsed downward movement, and following which, a stagnation occurred with local bursts. Analyzing the past hour by hour, we see that the main price jump occurred in the period 7:00 - 8:00 [UTC+00 time at the trading terminal], which looked like speculative interest. After that, the reverse process occurred on the return of the quotation, winning back as a result of 100% of the past price surge and once again confirming the theory of speculative interest. As a result, the day ended with a narrow fluctuation within the pivot point [1.2200 / 1.2215].
As discussed in the previous review, traders were divided into two factions: the first ones with satisfaction recorded all previously received profits from a local downward impulse, waiting as a result of a clear fix lower than 1.2190. The second decided not only to wait outside the market, with previously received profit, but also to speculate on local upward price spikes.
Considering the trading chart in general terms [the daily period], we see that the recovery process is still in the region of 60% of mining relative to the magnitude of the elongated correction. The recovery process is in full swing, but it is advisable to see price fixing lower than 1.2150 so that the chances of updating historical lows increase. I remind you that the support range of our global trend is within 1.1957 / 1.2000.
The news background of the past day contained data on open vacancies in the United States labor market [JOLTS], where they were waiting for their cuts and received, but there is only one thing. The previous data was reviewed for the worse by 7.217M ---> 7.174M, and the current figures came out even worse than the forecast of 7.051M. These data influenced the American dollar, I doubt it, since before the publication of JOLTS, the dollar already managed to sag a lot in price and already at the time of publication the process of quotation recovery was going on. After that, the text of the minutes of the meeting of the Federal Committee for Operations on the Open Market was published, but its contents did not surprise investors, since all the information was already known and there was nothing new in it.
In turn, from the open spaces of the divorce proceedings, Brexit does not blow anything good. Therefore, EU leaders have criticized the proposal of British Prime Minister Boris Johnson on Brexit, accusing him of promoting unconstructive and vague ideas to resolve the issue of the Irish border. In fact, Europe's refusal regarding the current proposal, is no longer a theory, but the fact and the upcoming EU summit on October 17 and 18 are very likely to produce no results. In turn, the British parliament has already scheduled an emergency meeting immediately after the EU summit on October 19, where the main topic will probably be criticism of Boris Johnson's actions and coercion to postpone Brexit. In turn, Johnson will probably try to put to the vote the question of choosing between a postponement and leaving the EU without an agreement, but the outcome is already clear.
Today, in terms of the economic calendar, we have statistics on industrial production in Britain, where they are waiting for confirmation of data on a decline of 0.9%. After that, monthly GDP figures will come out and the Head of the Bank of England Mark Carney will speak, where, in principle, we do not expect anything cardinal, but there can still be pressure on the pound. In the afternoon, inflation data will come out in the United States, where they expect growth from 1.7% to 1.8%.
Further development
Analyzing the current trading chart, we see a characteristic stop with frames of 1.2190 / 1.2250, where the quote fluctuates listlessly. The behavior of quotes is very similar to the accumulation process, which often leads to jumps in the market. To be more detailed, yesterday's talk did not lead to anything and the quotation remained within the pivot point, that is, if you close your eyes to the impulse 7:00 -8: 00 [UTC+00 time is indicated by the trading terminal], then the volatility of the past day would be some 50 points and this is just a signal to accumulate.
In turn, traders carefully analyze the behavior of quotes, where, in principle, you can work both up and down, that is, locally opening positions on a possible impulse.
It is likely to assume that the accumulation of 1.2190 / 1.2250 will not last very long and the work on the method of breaking the boundaries seems to be the most acceptable tactic. I would like to note that it is less risky to work on lowering than on growth, thereby speculators are considering more likely buy positions.
Based on the above information, we concretize trading recommendations:
- We consider buying positions as a local surge above 1.2250, with the prospect of a move to 1.2285-1.2300.
- We consider selling positions as continuing the course and fixing the price lower than 1.2190, with the prospect of a move to 1.2150.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators on most time intervals are focused on lowering, which reflects the current market sentiment. Short-term intervals in view of accumulation, on the other hand, signal a variable interest.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(October 10 was built taking into account the time of publication of the article)
The current time volatility is 29 points, which is a low indicator even for the start of trading. It is likely to assume that the accumulation process will not go unnoticed and in the near future we will see a local surge that will lead to increased volatility.
Key levels
Resistance zones: 1.2350 **; 1.2500 **; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) **.
Support areas: 1.2205 (+/- 10p.) *; 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