From the point of view of complex analysis, we see a real rally in the market, expressed in inertial downward movement. In fact, this is a kind of local collapse, provoked by the information background in a compartment with a large number of speculative positions. Quite often, this kind of hesitation is called the abbreviation FOMO [Lost Profit Syndrome], where market participants fly into positions due to general panic, and here it's how lucky. The occurrence of this syndrome we identified in a previous review, where they suggested that traders not focus on trends, but work solely on the situation, monitoring the incipient inertia and jumps in activity on the market. This method turned out to be quite profitable, and it is possible that the syndrome will still remain for some time on the market. Regarding the technical part, we see the price returning to the psychological level of 1.3000 once again, where slowdown and subsequent rebound are recorded with surgical accuracy. As it turns out, there is still a chance to restore the downward movement, in some sense, yes, if such an essential background manages to push through the psychological level, which will provoke other players who are working to recover.
In terms of volatility, we see a real celebration of acceleration, where the indicators are already fixed third day in a row, the prevailing average daily value. Details: Thursday - 131 points; Friday - 125 points; Monday - 215 points; The average daily indicator relative to the entire analysis is 92 points [see volatility table at the end of the article].
Detailing the past minute by minute, we see a rather rare picture, and so, the inertial downward move was set at the opening of the new week at 00:00 and lasted until 20:30 [time on the trading terminal]. In fact, we recorded a whole movement without a pullback and corrections, and only at the moment of fixing the price in the region of the psychological level of 1.3000 did a stop with an extremely low amplitude of 1.2982 / 1.3000 occur.
As discussed in the previous review, speculators worked on activity jumps, where a small regrouping of trading positions was performed in the 1.3080 / 1.3100 area, and new trading operations were opened at 1.3074, aimed at the psychological level of 1.3000. The past day was truly profitable, but I think we will not stop there.
Considering the trading chart in general terms [the daily period], we see that the control level of 1.3000 keeps the quotation from the recovery process. In fact, its fracture would signal a possible change in the clock component of the medium-term upward movement. Details: medium-term upward trend - 08/12/19 BC vr .; global downward trend - 11/09/07 at vr.
The news background of the past day contained data on the PMI of Britain, where the acceleration from 47.5 to 50.0 was recorded in the manufacturing sector with a forecast of 49.8.
Market reaction to statistics was fundamentally absent due to the strong external background, coupled with a massive speculative mood.
In terms of a general informational background, we are looking forward to the early start of new negotiations between London and Brussels regarding the relationship agreement after Brexit. So, the uncertainty in actions and unstable rhetoric frightens investors, which puts pressure on the British currency, and there were only a number of statements reflecting opinions about the upcoming negotiations. During the weekend, there was information that Prime Minister Boris Johnson outlined the position that England would not make concessions on issues related to standards and rules in the field of competition, subsidies and social protection, since the British rules are more perfect. Against the background of such a step, the main representative of the European Union at the talks with Britain Michel Barnier answered with an explanation. So, during a February 3 press conference in Brussels following a meeting of the European Commission, Barnier said that the best conditions for Britain would be if membership in the European Union remained, but since Great Britain decided to leave the EU, they would get the best possible option. The EU's chief negotiator indicated that the mandate for negotiations with the United Kingdom covers three main areas: economic partnership, security partnerships and the institutional environment for future bilateral partnerships.
"We are ready to offer a high-performance trade agreement as a central pillar for our partnership, including zero tariffs, zero quotas for all products that enter our common market, an ambitious free trade agreement with a wide coverage of various sectors, from business services to communications and environmental services. We also hope to establish a system of electronic commerce, intellectual property protection and access to our relevant government orders. We are ready to offer all this, even despite the fact that we know about the powerful competition that will arise between Britain and the EU in the future, "said Michel Barnier.
At the same time, Barnier recalled that one of the most problematic issues would be related to trade and fisheries.
Today, in terms of the economic calendar, we have published the index of business activity in the UK construction sector, where growth is expected from 44.4 to 46.6.
Further development
Analyzing the current trading chart, we see that the quote is concentrated on the area of the psychological level, still showing increased activity, which signals the persistence of the FOMO syndrome. In fact, overselling is clearly felt, but if we look at the opposite side, we will see that the inertia will still persist in the market and it puts pressure on the quote. Thus, we should continue to work on the situation, considering having inertia, as well as impulses as the main local operations.
From the point of view of the emotional mood of market participants, we see an extremely high speculative operation rate, which is likely to lead to high activity on the market again.
By detailing the per minute portion of time, we see that at night a stagnation was formed with subsequent pullbacks, where the quote is still within the psychological level. During the start of the European trading session, a surge in the activity of short positions was recorded.
In turn, speculators are actively working on horse racing, at the same time analyzing the framework of the psychological level. In the near future, there will be a new bay of trading volumes.
Given the overall picture of the actions, it is possible to assume that the 1.2960 / 1.3030 framework will play a key role in the future impulse regarding which tour operations will be carried out.
Trading tactics are built on the method of working in an impulse, while focusing on the points of price fixing relative to the values of 1.2960 / 1.3030 at the same time.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in case of price fixing higher than 1.3035.
- Sell positions are considered in case of price fixing lower than 1.2960, not a puncture in the shadow of a candle.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators of technical instruments unanimously took a downward position due to the inertia, reflecting the market background.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(February 4 was built taking into account the time of publication of the article)
The current time volatility is 42 points, which is already good for the morning time. It is likely to suggest that volatility may continue to accelerate if FOMO syndrome persists.
Key levels
Resistance zones: 1.3170 **; 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
