The pound / dollar currency pair has become closer to the range level, what this can mean and what are the next steps - we will answer these questions in our article
From the point of view of technical analysis [TA], we see that the quote with surgical accuracy hit the range of 1.2770 [1.2750 / ( 1.2770) / 1,2800], where it slowed down and formed a rollback. In fact, we got a full move from one border to another in one trading week. The movement between the two power levels of 1.2700 / 1.3000 has been going on for almost a month, and this wide range is, in some respects, a temporary haven in connection with the ambiguity and varying interests of market participants. Thus, the rapprochement with the range level once again confirms that the characteristic overbought, although not so pronounced, is still present in the market, where only one thought of rapprochement with a psychological level of 1.3000 changed interests, returning us all to the same fulcrum. In terms of volatility, there is clear evidence that market participants are experiencing clear ambiguity, where the daily fluctuation from day to day cannot reach the average.
Analyzing the past hourly hour, we see that basically the quotation stood in one place and only in the interval 14:00-16:00 [UTC+00 time at the trading terminal] there was a local surge of short positions, but it had insignificant heights of 47 points. The most interesting point is that just this impulse led to a control convergence of prices with the level of 1.2770.
As discussed in the previous review, the forecast for the reduction of quotes to 1.2770, at the beginning of last week, came true at 100%, which is good news. Most traders, in turn, did not wait for a control touch with a range level and already within its borders 1.2800 began to take profits, which was the right decision, and we can only rejoice at the profit. Further actions were in terms of waiting for price fixing relative to the control points 1.2750 / 1.2800, which did not happen.
Considering the trading chart in general terms [the daily period], we see that the movement within the specified limits of 1.2770 / 1.3000 is still preserved in the market, actually forming at the peak of the inertial course of the flat. In a global view, the downward trend is still in the market.
The news background last Friday did not have statistics in it. Thus, the movement was built in terms of technical moves, coupled with a small information background.
In terms of information flow, the noise was within normal limits. Due to this, the pre-election race in the British Parliament continues to gain momentum. At the same time, Boris Jones is trying to clutch at everything that leads and does not lead in terms of attacking the Labor Party, and the "witch hunt" has already accused Johnson of sponsoring his party by Russian businessmen. I think this is only the beginning, it will be hotter and funnier, and so, in pursuit of sympathy of the voters, the Prime Minister took up the mop, conditionally helping to eliminate the effects of heavy rains, where in some regions of the country the monthly rainfall fell per day. Johnson's step once again made the public laugh, giving out newspaper headlines everywhere in the plan "Even Teresa May would have done better."
In turn, the new head of the European Commission, Ursula von der Leyen, at a press conference in Berlin, announced the cohesion of the EU countries after such a long divorce proceedings.
"We, Europe, have gained new strength from the crisis with the exit of Britain. Yes, I mean Brexit. Of course, we regret that our British friends want to leave us. However, the experience of Brexit to many doubters in the EU opened its eyes and showed that they are represented by the European Union." said the head of the European Commission.
Today, in terms of the economic calendar, we have preliminary data on Britain's GDP for the third quarter, where they expect a further slowdown in economic growth from 1.3% to 1.1%. At the same time, data on industrial production are published, where the decline should be from -1.8% to -1.3%. In the United States today is a holiday, celebrating Veterans Day, which may affect trading volumes.
Further development
Analyzing the current trading chart, we see a pullback from the level of 1.2770, but so far without any jumps. In principle, the reaction of the market and its participants is completely adequate. We have a strong fulcrum, traders moved to fixing previously open short positions, almost the entire past week was in downward tones, the current pullback is a normal phenomenon. In terms of volatility and mood of market participants, we have a distinct weakness, where most simply look at the behavior of quotes.
By detailing the movement per minute, we see a weak pullback 38 points from the control point, where the quote is conditionally still within the range level. Volatility at this time is made up of some 8 points in the hourly average.
In turn, traders are in no hurry to rush to action and wait for a clear price fixing above or below 1.2750 / 1.2800, while maintaining an inertial mood.
Having a general picture, it is possible to make a number of scenarios: First, the quotation considers the range level once again in terms of rebound, where you first need to fix higher than 1.2800, and then shoot in the form of inertia to the area of 1.2830, where you are already entering the market; The second scenario considers the breakdown of the long-playing range level of 1.2770 [1.2750 / ( 1.2770 ) / 1.2800], where it is necessary to fix a clear price fixation below 1.2750.
Based on the above information, we derive the following trading recommendations:
- Buy positions are considered in the region of 1.2830-1.2840.
- Sales positions are considered in case of clear price fixing lower than 1.2750.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the main spectrum of time intervals signal that downward interest remains. Short-term intervals fluctuates in the existing pullback, signaling a versatile interest.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(November 11 was built taking into account the time of publication of the article)
The volatility of the current time is 30 points, which is a low indicator for this time section. It is likely to assume that in case of a breakdown of the key level [1.2770], volatility may accelerate.
Key levels
Resistance Zones: 1.3000; 1.3170 **; 1.3300 **.
Support areas: 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
*** The article is built on the principle of conducting a transaction, with daily adjustment
