From a complex analysis, we see a continuing downward interest set by an earlier inertial move, where the quote came close to the psychological level of 1.1000 and formed a local slowdown. We see that short positions were under strong pressure from the control level, which affected the volatility, as well as the course itself. At the same time, we should not omit the point that the extreme inertia move (23.01.20-27.01.20) was conditionally integral, thus local overheating of the meek positions could occur. Otherwise, together with the psychological level of 1.1000, there would already be a rebound/correction. Based on the above reasoning, we can assume that the downward move set in the first days of January has a chance to develop into a full recovery, where the quote has already reached the second level of the oblong correction. That is, in theory, we have more support for sellers than we had before.

In terms of volatility, we see a sharp slowdown in activity by about 40% relative to the daily average. Many regard this activity as a kind of platform for the future jump.

Analyzing the past day by the minute, we see a conditional lateral movement with a variable amplitude of 10-20 points. The oscillation structure consists of more than 30% Doji candles.

As discussed in the previous review, downside traders closed their trading positions due to the risk of a rebound. The next steps were in terms of a thorough analysis of the quote behavior and fixing points, where the market needed to fix below 1.0980 to resume short positions.

Looking at the trading chart in general terms (the daily period), we see a renewed recovery process, where the quote has already reached the second stage of interaction. Let me remind you that the oblong correction, in the structure of the global downward trend, has been held for at least four months, where the recovery steps are coordinates #1 – 1.1080; #2 – 1.1000; #3/1 – 1.0950; #3/2 – 1.0879.

The news background of the day included data on new home sales in the United States, which recorded a more significant decline than expected. So, the previous data was revised for the worse - from 719 thousand to 697 thousand, and the current figures came out with an indicator of 694 thousand with a forecast of 719 thousand.

There was no market reaction to the statistics, perhaps because of the general slowdown or perhaps because of the risk of the upcoming Fed meeting, where, in principle, nothing drastic should happen.

In terms of the general information background, we see an increase in noise about the coronavirus, which is actively inflated in the media. So, the virus itself does not affect the world economy at the current scale, whatever the media wrote, it scares the other. After analyzing the flow of information, as well as the trends of search engines, it was noticed that almost daily, the popularity of the discussion is growing, affecting all corners of the world. This increase in discussion can put pressure on public opinion, where even without the facts, we will get a tool for manipulation, which will be reflected in the market as a fact. It is worth considering as a hypothesis in the analysis.

In terms of the long-running Brexit process, we have the comment of the EU's chief negotiator, Michel Barnier, who believes that Brexit will inevitably lead to negative consequences for the British economy, in contrast to the consequences on the territory of the European Union.

"Even without the UK, the EU forms a single market of 450 million people, a truly global market. Our economic power allows us to stand proudly on the world stage and speak on equal terms with other superpowers on issues such as the economy, climate change, security, and trade," said Michel Barnier.

Today, in terms of the economic calendar, we have data on orders for durable goods in the United States, the volume of which may increase by 0.6% compared to the previous period, where there was a decline of 2.0%. Data on house prices will also be published (S&P/Case-Shiller), where it is expected to accelerate from 2.2% to 2.6%.

Further development

Analyzing the current trading chart, we see still low activity, where the quote is trying to come close to the psychological level of 1.1000. The fact of pressure from the control level is obvious, but at the same time, sellers do not seek to leave the market and continue to consider further recovery of the quote relative to the oblong correction.

In terms of the emotional component, we see clear indecision, which is reflected in almost everything, but even in it, we see a large flow of speculative positions.

Detailing the trading day that is available every minute, we see that just now local bursts have started to appear, all the previous candles are in the structure of a sideways move.

In turn, traders continue to painstakingly analyze the behavior of the quote, where special attention is paid to such values as 1.0980 and 1.1040.

It is likely to assume that the quote will continue to concentrate on the psychological level, where punctures are not excluded, but before entering the market, it is necessary to carefully analyze the price-fixing points to filter out false breakouts as much as possible. At the same time, the tactic is "Breakdown or Rebound".

Based on the above information, we derive trading recommendations:

- Buy positions will be considered in the event of a rebound from the psychological level of 1.1000 and a price fix higher than 1.1040.

- Sell positions are considered if the downward interest is held and the price is fixed below 1.0980, without the shadow piercing the candle. The perspective of the move is located in the following stages: #3/1-1.0950 and #3/2-1.0879.

Indicator analysis

Analyzing different sectors of timeframes (TF), we see that the indicators of technical instruments continue to work for a decrease relative to all major time intervals. It is worth considering that minute sections display variable interest due to the process of slowing down.

Volatility per week / Measurement of volatility: Month; Quarter; Year.

The volatility measurement reflects the average daily fluctuation, based on the calculation for the Month / Quarter / Year.

(January 28 was based on the time of publication of the article)

The volatility of the current time is 18 points, which is an extremely low indicator for this section of time. It is likely to assume that a kind of accumulation lasting as long as the second day will lead to the fact that we will see a surge in activity and there will no longer be a breakdown of the level or a rebound will occur in the market.

Key levels

Resistance zones: 1.1080**; 1.1180; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.

Support zones: 1.1000***; 1.0900/1.0950**;1.0850**; 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level

***** The article is based on the principle of conducting a transaction, with daily adjustments.