Over the past trading day, the currency pair euro / dollar showed a low volatility of 33 points again, as a result of which confirms the previously built theory of speculators. From the point of view of technical analysis, we see that the recovery process from the mirror level of 1.1180 led the quote to the next value in the face of the range coordinate 1.1100, where the quote slowed down and, as a fact, formed ascending candles. In terms of volatility, we were faced with a sequential decline that began on Monday [October 21], where volatility fell below the daily average. The following days were reflected in a further decline: 40 ---> 38 ---> 33 points. The emotional component and the so-called FOMO**** of the market participants began to decline, and as a result, this affected the volatility.
Analyzing the past hourly hour, we see a quite boring low-amplitude oscillation in the form of a closing upward movement, where the hourly average candlestick had a volatility of about 5 points. The only remarkable thing was that the support was found precisely in the features of the range level 1.1100.
As discussed in the previous review, speculators, working to lower from the value of 1.1145 (1.1140), switched to the complete fixation of previously opened transactions as soon as the quotation reached the first forecasted point of 1.1120. The reason for so much cardinal progress was due to the fact that the market will remain extremely high ambiguity, which does not allow to fully return sellers to the market, even though the market has an extremely high overbought. As a result, an exit with a small but still profitable profit.
Considering the trading chart in general terms [the daily period], we see that the pullback from the level of 1.1180 is extremely insignificant, and if the quotation returns back to the level of 1.1180, there will be a clear confirmation that there is a characteristic indecision of market participants in terms of short positions. From the point of view of the clock component, we see the elongated correction that continues to this day, built at the moment of an emotional flurry of market participants, just the echoes of this same FOMO **** are not letting us now properly recover in terms of the main course.
The news background of the past day did not have statistical data for Europe and the United States. Thereby, the main focus of market participants was built on monitoring the information tape.
Thus, in terms of informational background, there was a further analysis of the UK & EU divorce process, where, as we already know, it was not agreed, in the shortest possible time, as the British Prime Minister Boris Johnson planned for this. Now, we are talking about the postponement of Brexit, and on the part of the European Union, a meeting of EU ambassadors was organized in the Belgian capital, where representatives of the Commonwealth countries agreed that they could provide the United Kingdom with another postponement. From the discussion, it can be distinguished that not all EU members supported the three-month delay of Brexit, so, for example, the French insist on a tight deadline until November 15. It was also raised in the discussion that even in the case of a three-month delay, Britain will have the opportunity to withdraw from the EU earlier if the agreement is ratified. Let me remind you that the meeting of the EU ambassadors was unofficial, thus no official decisions were made. The final decision will be made on Friday during the next meeting of EU ambassadors.
In turn, the official representative of the Cabinet of Ministers of Germany, Steffen Seibert, said that Germany would not mind delaying Britain's exit from the European Union if it was agreed.
The reaction of the single currency to the information background was somewhat positive, although not sharp. In fact, we had another reaction to the fact that the fears of hard Brexit are reduced.
Today, in terms of the economic calendar, we have a meeting of the European Central Bank, which will be the last for its head, Mario Draghi. Should I expect something from the decision of the ECB and the subsequent press conference? In fact, a decrease in the interest rate with its transfer to the negative zone is possible. There were signals even at the time of reducing the deposit rate, but I seriously doubt that Draghi's last decision would be to lower the refinancing rate. The new head of the ECB, Christine Lagarde, will already have this step, but now, what you can hear is just the comments of Mario Draghi at the press conference, and if he says anything about the future decline, the euro will obviously reduce. I would like to repeat once again that, probably, we won't hear anything regarding further actions of the regulator; there will be just a farewell speech by Draghi.
In terms of statistics, we have a data package for Europe, where there are not so bad data. So, where the index of business activity in the manufacturing sector grows from 45.7 to 46.1, the composite index in business activity from Markit also shows growth of 50.1 -> 50.03, as the service sector 51.6 -> 51.9. In the afternoon, we are waiting for data on durable goods in the United States, where they forecast a decrease of 0.2%
Further development
Analyzing the current trading chart, we see a smooth upward swing with a small stop, where the accumulation of 1.1128 / 1.1145 has formed. In fact, buyers are trying to enter the phase of inertial motion again, but the first thing to see is only a return to the resistance point of 1.1180, before discussing the return to inertia widely.
Detailing the hourly available time interval, we see that the Pacific and Asian trading sessions were in terms of horizontal movement, showing low volatility. With the onset of the European trading session, there was a surge in breaking through the boundaries of the existing accumulation of 1.1128 / 1.1145 . Probably, the price for positive statistics for Europe is already being laid. In terms of the emotional component, characteristic ambiguity remains.
In turn, speculators will take profits from short positions, went into the waiting stage, analyzing the behavior of the quote relative to the coordinates 1,1100 / 1,1145. As we can already see from the result, a local entrance to long positions was made with a primary perspective in the direction of 1.1170-1.1180.
It is likely to assume that in the case of the birth of the next FOMO there is a chance to return to the mirror level of 1.1180. Deeper steps are already considered with the support of the information background and price fixing higher than 1.1180.
In turn, the tactics of monitoring the news feed remains unchanged, revealing information about Brexit as early as possible.
Based on the above information, we derive trading recommendations:
- Some traders already have buying positions in the direction of 1,1170-1,1180. If you do not consider yourself a speculator, then it is better not to rush and wait for the price fixing higher than 1.1180.
- We consider selling positions in the event of a change of background or another development of the level of 1.1180.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators unanimously signal an upward trend, where short-term and intraday periods worked on the existing price impulse. The medium-term outlook, on the other hand, invariably retains upward interest against the background of an earlier inertia.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(October 24 was built taking into account the time of publication of the article)
The current time volatility is 33 points, which is already good for the start of trading. It is likely to assume that due to dense statistics and a meeting of the ECB, volatility will exceed the daily average. The slowdown in the volatility of the last three days confirms the waiting position of traders, which can result in an acceleration in terms of volatility.
Key levels
Resistance Zones: 1.1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support areas: 1,1100 **; 1,1000 ***; 1.0900 / 1.0950 **; 1.0850 **; 1,0500 ***; 1.0350 **; 1,0000 ***.
* Periodic level
** Range Level
*** Psychological level
**** FOMO - Lost Profit Syndrome
***** The article is built on the principle of conducting a transaction, with daily adjustment
