The pound/dollar currency pair showed high activity, during which the quote jumped to the resistance level of 1.2620 once again, where, on a regular basis, a price rebound in the opposite direction arose. In this case, the main impulse was speculative excitement, on the basis of which the existing price jumps arose.
Analyzing the past trading day every minute, two main rounds of speculation are recorded. The first one arose at 10:00 and lasted until 15:30 UTC+00, during which the quote jumped to the level of 1.2620. The second round was expressed in consolidating long positions and working out the level of 1.2620 in the downward direction, where speculators caught the wave from 16:00 and held it until 18:30 UTC+00, eventually winning back most of the previous jump.
Market dynamics amounted to 104 points, which is 7% lower than the average daily indicator, and this is not considered a slowdown. It is worth considering that the minute and hourly dynamics over the past day exceeded the average level in activity, which confirms speculative excitement in the market.
The news background of the past day contained data on the UK labor market, where the indicators came out so good that investors simply did not believe in their reliability. The unemployment rate in the United Kingdom remained unchanged, 3.9%, It can be recalled that they expected growth to 4.2%, which was adequate in the current situation. Applications for unemployment benefits in June declined completely by 28,100 compared with the previous month, incidentally, forecasts indicated an increase in applications of 250,000.
"Only miracles", this is how the data on Britain met the market, from which there was a decline at the time of publication of the statistics instead of the growth of the pound.
From the point of view of fundamental analysis, this phenomenon is interpreted as a distrust of the market to the government and the reporting provided.
On the other hand, data on retail sales in the United States were published in the afternoon which, instead of slowing to -3.0%, reflected an increase of 1.1% in annual terms, and it accelerated by 7.3% in the monthly month for June. It is worth recalling that retail sales are one of the most important indicators of the state of the US economy, as consumer spending accounts for about 70% of the country's GDP. Thus, current retail data directly reflect the economic recovery in the United States.
The statistics did not end there, as the United States published a weekly report on the number of applications for unemployment benefits, which came out slightly worse than forecasts. Initial applications declined from 1,310,000 to 1,300,000 with a forecast of decline to 1,250,000. Repeated applications also declined, that is, from 17,760,000 to 17,338,00 with a forecast of decline to 17,600,000.
It can be seen that the data for the United States was located to strengthen the dollar, but speculators intervened here, who did not give the opportunity to use optimistic indicators at the time of publication.
Today, in terms of the economic calendar, we have data on construction in the United States, where the volume of construction of new homes can rise by 12.9%, and the number of building permits by 2.5%. Indicators indicate a possible increase in the US dollar.
From the point of view of a comprehensive analysis, we see the concentration of prices all at the same value of 1.2550, where traders are trying to keep a round of short positions in the market. A successive development of the level of 1.2620 and maintaining the quote below it indicate a predominant downward interest, which in theory, can give more impressive changes than just a decline to the level of a variable support of 1.2500
The burning forecast is that short positions are relevant, and in this case, we will enter them below 1.2535, with the first take profit at 1.2500. The subsequent movement will depend on the behavior of market participants within the level of 1.2500, since in case of breakdown, a path will open for us in the direction of 1.2450-1.2350.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical tools relative to minute and hour intervals hold a sell signal by focusing the price at around 1.2550. The daily period signals a purchase, but if the price is consolidated below the level of 1.2500, everything can change.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the daily average fluctuation, calculated for the Month / Quarter / Year.
(July 17 was built taking into account the time of publication of the article)
The volatility of the current time is 25 points, which is 77% lower than the daily average. Such a low activity indicator at the start of the European session signals the quick arrival of speculators in the market, which will lead to increased volatility.
Key levels
Resistance Zones: 1.2620; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Zones: 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411); 1.1300; 1.1000; 1.0800; 1.0500; 1.0000.
* Periodic level
** Range Level
*** Psychological level
