From the point of view of a comprehensive analysis, you can see the concentration of trading forces within the level of 1.2500, and now let's talk about the details.
The past trading day had a variable fluctuation within the range of 1.2450 / 1.2500, where on a systematic basis, there was speculative interest that locally set the tone for the market. Everything was fine if it were not for price consolidation above the level of 1.2500, which changed the balance of trading forces and scared the followers of downward development. So, do not be surprised, we wrote many times that at this time the market has a high emotional noise that speculators are using, which means local jumps, consolidations, and punctures with shadows of important coordinates, and this will not lead to something drastic in the market.
Our task is to be on the wave of noise and even if trading positions are not held for weeks and do not have a strategic message, they will still bring a stable profit.
Relative to the theory of development, so here the oscillation in the range is preserved 1,2150//1,2350//1,2620 where, during the middle level testing, the quote managed to return to the upper part of the range of1.2500/1.2620, while the downward tact from June 11 was not violated.
There is a chance to further lower the price in the direction of 1.2350 - 1.2150, but our task is not just a goal, to make a forecast about the direction, we need to be on the wave of speculation, and therefore, we will continue to focus on local operations, starting from from the available price.
Analyzing the past trading day every minute, you can immediately see the speculative excitement. So, the first bursts of activity were recorded during the Asian session from 1:00 to 2:00 UTC+00, where a jump appeared from scratch, first down and then up, as if someone had played with dollar positions. After which, speculators returned already from 11:00 UTC+00, where a surge of long positions arose, on the wave of which the level of 1.2500 was broken and a narrow accumulation was formed in the range of 1.2500/1.2540.
In terms of volatility, a slight slowdown is recorded relative to the average daily indicator [-21%], but it is worth considering that a dynamics of 100 points indicates a high activity, thereby we are not talking about a slowdown. Since the beginning of June, the daily average is 129 points, which is 18% more than in the previous month. The most dynamic month since the beginning of the year is March, the average daily activity of which was 269 points, and the lowest volatile month is January – 90 points, the average daily candle.
As discussed in the previous review, traders expect quotes to recover in the direction of 1.2350-1.21150 values, but due to high speculative excitement, work is being carried out with respect to local fluctuations, which implies a breakdown of variable stagnation boundaries.
Considering the trading chart in general terms (the daily period), you can see that as far as the quote has not jumped recently, the market is still worth the scope of 2016-2017.
The news background of the past day included preliminary data on the business activity index in the United Kingdom, where in the manufacturing sector the index grew from 40.7 to 50.1, and the services sector grew from 29.0 to 47.0. As a result, the composite indicator grew from 30.0 to 47.6, which inspires investors with not a small optimism of economic recovery.
At the time of publication of macroeconomic statistics, the pound began to decline, perhaps the news played in advance.
A similar indicator was published in the afternoon, but for the United States, which also came out better than the forecast. So the index of business activity in the service sector rose from 37.5 to 46.7, and the manufacturing index rose from 39.8 to 49.6. As a result, the composite PMI showed an increase from 37.0 to 46.8.
There was no reaction of the market to the statistical data for the United States, although the indicators were not bad.
In terms of the general information background, we have a speech by Prime Minister Boris Johnson, during which he announced the third and most ambitious stage of easing quarantine measures introduced during the escalation of coronavirus infection. Of the permissions, we were talking about opening pubs, restaurants, hotels, libraries, temples, cinemas, museums and hairdressers from July 4. However, fitness centers, night clubs, swimming pools, massage parlors, tattoo parlors, exhibition centers are closed as well as concert halls.
"I can announce that we will open restaurants and pubs. It will be recommended that contacts between visitors and employees be minimized and limited to customer service at the tables. We will also ask businesses to help the National Health Service identify potential infected people by collecting contact information for visitors to prevent local outbreaks of the disease, as is done in other countries," Johnson said.
The reaction of the market to the statement of the Prime Minister of Britain has supported the pound sterling.
Today, in terms of the economic calendar, we do not have impressive statistics for Britain and the United States, thereby the market will continue to monitor the external background and follow the emotional mood of speculators.
Further development
By analyzing the current trading chart, one can see the concentration of trading forces within the range of 1.2500/1.2540, where activity is reduced to a minimum. This kind of slowdown is only temporary in nature, where, in terms of the logic of technical analysis, we should expect a reverse move in the direction of 1.2450, but chaotic jumps outside the rules of technical analysis are not excluded due to high speculative excitement in the market.
It can be assumed that the price fluctuation in the region of 1.2500 / 1.2540 will end in the next few hours, where the best trading tactic will be the method of working on the breakdown of established boundaries, which will correspond to the local operations strategy.
Based on the above information, we derive trading recommendations:
- Consider buy positions above 1.2545, towards 1.2580.
- Consider sales positions below 1.2490, with the prospect of a move to 1.2450. In the case of price consolidation below 1.2440, we will open the way in the direction of the values of 1.2350-1.2150.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the performance of technical tools in the minute and hour periods signal a purchase, due to the focusing of prices above the level of 1.2500. The daily period continues to signal a sale due to a downward tact of June 11th.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(June 24 was built taking into account the time of publication of the article)
The current time volatility is 44 points, which is still 65% lower than the average daily indicator, but we are only at the beginning of the European session. It can be assumed that speculative excitement will continue, as a result, volatility indicators will reach equilibrium levels.
Key levels
Resistance Zones: 1.2500; 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
**** The article is built on the principle of conducting a transaction, with daily adjustment
