From the point of view of a comprehensive analysis, we see a continuing upward interest from the area of the psychological level of 1.3000, where the quotes had previously found a foothold. In fact, we continue to observe the development of the theory of the Zigzag-shaped model [03.12.19-14.01.20], where the subsequent measure almost reached the control value. The most remarkable situation is that for several weeks there has been a gradual compression of the quote amplitude, which is just expressed in the Zigzag-shaped model. That is, the first correction phase of the Zigzag-shaped model had a value of 609 points, the second phase was already 329 points. The third phase has not yet arrived, since the pulse cycle has not yet been completed, but the deceleration is already evident. Hence, many traders agree that the market is preparing a platform to greatly accelerate quotes, which may come in the near future.
In terms of volatility, we have a kind of confirmation of the previously spoken words, that is, there is a slowdown in average daily indicators [95; 79; 57.57 points] from the beginning of the week. From the point of view of the emotional component, we see a similar picture, but at the same time, the coefficient of speculative positions is still high.
Analyzing the past minute by minute, we see a general upward move, in the structure of which only at 14: 00-15:30 [UTC+00 time on the trading terminal] there were pulsed candles. The end of the trading day was in terms of narrow amplitude in the region of 20 points.
As discussed in a previous review, traders have been in long positions since Tuesday, where they entered trades from a value of 1.3215. Further manipulations were in terms of conducting transactions, where the first partial fixation point came in the area of 1.3050 with the subsequent movement of the restrictive order. The full perspective was considered in the region of 1.3100-1.3122.
Considering the trading chart in general terms [the daily period], we see the same ongoing process of upward movement from September last year. If you analyze the history of the chart, in particular, from the end of 2016, that is, a characteristic similarity. Thus, I advise you to consider it on the daily chart.
The news background of the past day had statistics on the United States, which turned out to be much better than forecasts. So, the indicators for applications for unemployment benefits declined by 46 thousand [Repeated -36 thousand. The forecast was -11 thousand; Primary -10 thousand, the forecast was + 5 thousand.]. At the same time, we have very good retail sales figures, which were supposed to slow down, according to forecasts, from 3.3% to 2.9%, but instead we saw an acceleration to 5.8%.
The reaction of the market to the statistics was extremely surprising, as the news in the United States came out exclusively in positive tones, which clearly should have influenced the growth of the dollar, but there it was. The growth of the dollar was extremely sluggish in comparison with the single currency during the publication period, which showed activity, but more on that in the next EUR/USD article.
In terms of a general informational background, we had no fatal noises. The market continues to discuss the previously signed first phase of the trade deal between the USA and China, and in Europe they grieve over Britain lost from the union. In turn, members of the European Parliament urge the EU to learn from Brexit.
Today, in terms of the economic calendar, we had data on retail sales in Britain, where we expected acceleration to 2.6%. As a result, we got 0.9%, which locally put pressure on the pound.
In the afternoon, we are waiting for statistics from the United States, where the rate of industrial production continues to decline from -0.8% to -1.2%, and construction of new buildings can be reduced by 2.6%, and building permits by 1.6%.
The upcoming trading week in terms of the economic calendar begins with a weekend in the United States, where Martin Luther King Day is celebrated. The following days have a stream of statistical data, as well as a meeting of the ECB, where there may be interesting details.
The most interesting events displayed below --->
Tuesday January 21
Great Britain 9:30 Universal time - Unemployment Rate: Prev 3.8% ---> 3.9% forecast
United Kingdom 9:30 Universal time - Change in the number of applications for unemployment benefits (Dec): Prev 28.8K ---> Forecast 24.5K
Wednesday, January 22
United Kingdom 9:30 Universal time - Retail Sales (YoY) (Dec): Prev 1.0% ---> Forecast 2.6%
USA 15:00 Universal time - Sales in the secondary housing market (m / m) (Dec): Prev -1.7% ---> Forecast 0.8%
Thursday, January 23
ECB meeting, followed by a press conference
Friday January 24th
Great Britain 9:30 Universal time - Composite PMI Index
Great Britain 9:30 Universal time - Services PMI
Further development
Analyzing the current trading chart, we see that the quote still adheres to the upward mood, locally touching the forecasted area of 1.3100-1.3122. In fact, the Zigzag-shaped model has reached the area of its embodiment, which is good news for most traders. Now, we are faced with the task of understanding how the quotes will behave at a given value, whether there will be a stop with the third phase, where the slowdown will be confirmed.
In terms of volatility, we are still in an extremely sluggish state, although it is enough for speculators, but many are waiting for acceleration.
By detailing the time interval that we have per minute, we see that the main fluctuation began to occur in anticipation of the publication of data on Britain, having rather remarkable impulse candles.
In turn, traders continue to work locally with long positions from the value of 1.3015. Moreover, fixes move to the full volume, as the price has come close to the forecasted area.
Having a general picture of actions, it is possible to assume that the theory of the Zigzag-shaped model played a significant part in trading, and there is still a chance of keeping it. Thus, traders are closely monitoring the momentum in order to work on a possible inertial course). If the theory of acceleration is confirmed, we can see a full-fledged inertial move that breaks the boundaries of the Zigzag-shaped model.
Based on the above information, we derive trading recommendations:
- There were positions for the purchase from the value of 1.3015, and now, deals have already been fixed.
- We consider selling positions in the reverse phase from 1.3050, to 1.3000-1.2985. A deeper move is considered if the price is fixed lower than 1.2955.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators of technical instruments have an upward interest in all time intervals, which reflects the current tact of the trading model.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(January 17 was built taking into account the time of publication of the article)
The current time volatility is 53 points, which is already better than the day before. It is likely to assume that acceleration of volatility will happen soon and so, it is worth being prepared for it.
Key levels
Resistance zones: 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
