From technical analysis, we see that after Friday's rally, a rather rapid recovery began, where the cluster played a variable fulcrum on November 12-14. There was a complete recovery, where the quote locally rose above the mirror level of 1.2885, from which it all began, but the bulls failed to hold on to these limits, so we hung in the middle of a long-playing flat of 1.2770/1.3000. What we have in fact - a downward movement in the structure of the side channel, where, against the backdrop of a sharp rally at the end of last week, a local overheating of short positions formed, probably during the first acceleration of volatility in twenty trading days. Thus, local fixation of transactions was made, and again everyone remembered the downward trend, only the trading volumes were already insufficient, so we see a chaotic oscillation with an attempt to align trading interests. As for volatility, we cannot say that everything is very bad; those who read my articles remember that there were periods and worse. So, 76 points, which reflect yesterday's trading day, is 15.5% below the daily average, and especially after Friday's rally (104 points), we have a completely normal fluctuation. In terms of the emotional state of market participants, improvements are visible, and they are displayed in terms of volatility, but in terms of the overall background, the ambiguity remains, and it is expressed within such a wide flat of 1.2770/1.3000.
Analyzing the hourly past day, we see that the movement almost from the beginning to the end of the day carried an upward character, and only in the period of transition between the days, we saw a sharp slowdown, expressed in consolidation.
As discussed in the previous review, a considerable part of traders still hoped for the resumption of the downward course, for this reason, at the time of Friday's rally, an incomplete volume of trading operations was recorded. In turn, fixing the price higher than 1.2885 led to a local surge in long positions, this is reflected by the candles of 16:00-17:00 (time on the trading terminal), but the desire to top up in short positions prevailed, thus we saw an almost instantaneous surge back.
Looking at the trading chart in general terms (daily period), we see a perfect flat of 1.2770/1.30000, which is not often seen in the market. It is necessary to be extremely attentive to its borders, as the breakdown of a particular framework will lead to an increase in the activity. At the same time, traders continue to discuss the possible graphic figure "Triple Top", which is now in the final phase.
The news background of the last day did not have in itself noteworthy statistics on the UK and the United States, thus the discussion of Brexit and the leaders of the election race to the Parliament of the United Kingdom once again captured the entire remaining background.
So, now everyone is actively discussing the election manifesto of the Conservative Party, which was presented on Sunday by its leader Boris Johnson. As always, there were a lot of loud statements, the most popular slogan sounded in terms of promises to send the Brexit agreement to parliament for a vote by December 25. At the same time, Johnson will promise not to increase several key tax measures if he wins next month's general election, of course.
Boris Johnson and his campaign team decided to keep up with Corbyn and said Labor with the Scottish National Party could end up spending 150 million pounds ($194 million) by 2020 on a new referendum on Scottish independence and Britain's membership of the European Union. The Labor Party, meanwhile, unveiled a pledge card for pensioners, including a £ 10.8 billion social care package, and said the tories could not be trusted to care for the elderly.
In turn, according to the ICM poll, the Conservative Party is slightly in the lead in the election race - 41%, while Labor is slightly behind - 34%.
The emphasis of the Labor Party, particularly Jeremy Corbyn, deserves respect, and many economists agree. So, a former member of the Bank of England's monetary policy committee Danny Blanchflower and more than 160 economists and scientists supported the election promises of the Labor Party as the best way to help the UK economy. In a letter published in the Financial Times, economists said productivity growth over the past decade had virtually stalled and more public investment was needed, especially in green technologies aimed at energy, transport, housing, industry, and agriculture.
"As economists and people working in various spheres of economic policy, we have carefully looked at the economic prospects of political parties. It seems obvious to us that the Labor Party has not only understood the deep problems we face but has developed serious proposals to address them," an excerpt from the economists' letter reads.
Today, in terms of the economic calendar, we had statistics for the United States, where new home sales are projected to grow by 1.2%. At the same time, the composite index of housing costs also expects growth from 2.0% to 2.1%.
Further development
Analyzing the current trading chart, we see that the stagnation of the night period has turned into a sharp descent, confirming the previously announced information regarding the opening of short positions. Many flatter themselves with the hope of a characteristic gain in terms of decline and touching the lower border of 1.2770. In principle, everything is possible, judging by the walking cycles in the channel, right now we have a downward beat.
Detailing the minute-by-minute movement, we see that the characteristic impulse was born from the very morning of 9:00, where the breakdown of the night consolidation occurred. Now the momentum has turned into inertia, which stimulates short positions.
In turn, traders continue to work on the decline, just having topped up the transaction.
Having a general picture of the actions, we can assume that the probability of descent up to the control level of 1.2770 is still there, which confirms the current oscillation. Thus, the work on the decline still makes sense, where the top-up has already been made and may still be at the time of the passage of the mark of 1.2823.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in the case of finding a fulcrum in the area of the range level of 1.2770.
- Positions for sale are already being maintained by traders with the process of topping up. The fixations are considered within the level of 1.2770.
Indicator analysis
Analyzing different sector timeframes (TF), we see that the indicators in all major time areas signal the prevailing downward interest, which is confirmed on the trading chart.
The volatility for the week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the average daily fluctuation, with the calculation for the Month / Quarter / Year.
(November 26 was built taking into account the time of publication of the article)
The volatility of the current time is 53 points, which is within the normal range for the current period. It is likely to assume that in the case of maintaining the existing mood, the acceleration of volatility and, as a fact, the excess of the average daily norm is still possible.
Key levels
Resistance zones: 1.3000; 1.3170**; 1.3300**.
Support zones: 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
*** The article is based on the principle of conducting transactions, with daily adjustments.
