The upward activity outside the level of 1.2620 ended as quickly as it arose on the market. The quote failed to maintain the previously set inertial course, which resulted in a slowdown and, as a fact, fixing previously opened long positions, which led to a surge in speculation in the opposite direction, fixing the quote below 1.2620. It is worth noting that the recent inertial move was part of the structure of the correctional movement, which appeared within the level of 1.2250.
Regarding market patterns, a price movement from 1.2250 to 1.2620 occurred on the market on April 22, which resulted in a reverse move, with the most impressive changes.
The news background of the past day had weekly data on the labor market in the United States, where they published indicators on the number of applications for unemployment benefits, which reflected the restoration of economic activity in the country. The data turned out to be much better than expected, and so, initial applications declined to 1,314,000 with a forecast of 1,380,000, previous indicators revised for the better 1,427,000 -> 1,413,000. Repeated applications also turned out to be better than expected, a decline of 698,000 to 18,062,000, with a forecast of 18,950,000. Previous data was also revised for the better, from 19,200,000 to 18,760,000.
At first, the reaction of the market participants was shocking, the quote was consolidated at the time of the publication of the data, but after about two hours, the traders came to their senses, and then there was a reverse move in favor of strengthening the US dollar. It is worth noting that it was on the basis of this background that the quote managed to stop the inertial movement, returning the quote below the level of 1.2620.
In terms of informational background, we have the incentive lever voiced by US Treasury Secretary, Steven Mnuchin, saying that he supports another round of direct payments to private individuals under the next law on assistance in connection with coronavirus. That is, the economy of the United States will receive an additional infusion of $ 660 billion, which will be focused on enterprises that really need help, as well as small businesses.
As we can see, the news and information background is prone to dollar positions.
Today, in terms of the economic calendar, we have another positive factor in the recovery of the US economy, producer prices should slow down from -0.8% to -0.3%, and possibly to -0.2%. Thus, the US dollar may continue to strengthen.
USA 12:30 Universal time - producer prices
From the point of view of complex analysis, we see a gradual downward move, which has already led the quote to the value of 1.2580, which reflects a variable level with confirmation from July 7, 14:00-15:00 UTC+00. In this case, the downward beat is set, the speculators are quite small in order to keep it in the direction of the previously derived range of 1.2150 // 1.2350 // 1.2620.
The burning forecast lies in the fact that the information and news background, paired with technical factors, has a positive effect on dollar positions, where, if the price is consolidated below, a path can open in the direction of values of 1.2500 - 1.2450 - 1.2350.
An alternative scenario may arise in the event of a different external background, which traders do not yet know about, in this case, a chatter in the variable range of 1.2580 / 1.2635 is not excluded.
Based on the above information, we derive trading recommendations:
- Consider sell deals in case of price consolidation lower than 1.2570, in the direction of the values of 1.2500 - 1.2450 - 1.2350.
- Consider buy deals in terms of a surge higher than 1.2600, towards 1.2620-1.2635, it is worth considering that the position is not the main one.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical instruments relative to minute periods work in the recovery phase, signaling a sale. But frequent intervals are close to a change in signal. The daily period, in turn, is still oriented towards the upward price movement.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the daily average fluctuation, calculated for the Month / Quarter / Year.
(July 10 was built taking into account the time of publication of the article)
The current time volatility is 38 points, which is 67% lower than the average daily value. It can be assumed that the deceleration process will soon come forward, and in this case, the reverse price movement may lead to an acceleration of activity in the market.
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
