From the point of view of a comprehensive technical analysis, we see that the quote continues to move within the psychological level of 1.3000, conditionally having lateral movement. In fact, the quote found support in the region of 1.2904 after December 23, where there was a stop with correction in terms of local tact. However, the quote was not able to draw something cardinal for us on small trading volumes, so we got a kind of chatter within the control level. At the same time, the absence of major players and the closed exchanges in Europe and America led to the formation of subtle exchange volumes that speculators have not yet taken advantage of. Let me remind you that in the previous review, we discuss the topic of the thin market, as well as systematic volatility in the last days of the outgoing year, and so, the topic has not yet been disclosed. Market dynamics in theory may arise, but if it is built solely on speculative interest, the clock component, as well as the main course of the market for a time will lose meaning, and we will see a kind of local spikes quotes without any fundamental component.
At this time, the average volatility is 56 points since the beginning of the week, which is certainly a low indicator for such an active pair as the pound / dollar, but if you adjust for the holidays, then everything is within normal limits.
In terms of the emotional mood of market participants, we see that large participants have already gone for the holidays, and speculative interest has not yet been fully disclosed.
Analyzing the past minute by minute, we see that impulse surges were still present on the market all day, but their value was approximately 30-45 points. A noteworthy point is that the sign of the jumps was systematic stagnation / micro-pullbacks, which need to be adopted for further work.
As discussed in the previous review, many traders relax and return to the market next year. Now, mainly speculators who earn on local races are working.
Considering the trading chart in general terms [the daily period], we see that we have a small pullback regarding the decline on December 16-23. In terms of a larger scale, we see that the quote returned to the scope of 1.2770 / 1.3000, that is, in the same flat that lasted more than six weeks.
The news background of the past day contained data on applications for unemployment benefits in the United States, where they expected a reduction in applications by 41 thousand, but as a result, received a reduction of 19 thousand: Primary -13 thousand; Repeated - 6 thousand.
Thus, the reaction of the market to the orders was not in favor of the dollar, where we saw an almost synchronous reflection together with the missing news and volumes.
In terms of informational background, we have a conditional lull in connection with the holidays, but there is also something interesting in this silence. Thus, the new head of the European Commission [EC] expressed concern about Britain's intention to shorten the transition period. According to Ursula von der Leyen, the transition period of 11 months is extremely short and there may not be enough time to resolve all issues.
"I am very worried about how little time we have left for negotiations. It is not only about the conclusion of a trade agreement, but also about many other topics. It seems to me that both parties should seriously ask themselves whether all these negotiations are possible in such a short time. I think it would be reasonable to take stock in the middle of the year and, if necessary, agree on an extension of the transition period," said the head of the EC.
In fact, we received a kind of risk preconditions for the transaction once again, as previously discussed by Brexit negotiator Michel Barnier. It can be recalled that in order to access the European market, Britain must comply with EU rules and guarantee comparable conditions for the production of goods and services. In case of non-compliance with the rules will have to agree on duties and restrictive measures.
Today, in terms of the economic calendar, we do not have statistics, and the background continues to be quiet.
The upcoming trading week in terms of the economic calendar does not favor events and statistics, which is understandable because of New Year's week. Markets do not work on January 1, and Europe is inactive from 31 to 1, thereby the dynamics of trading can be scarce.
Monday, December 30
USA 15:00 Universal time - The index of incomplete sales in the real estate market (m / m) (November): Prev -1.7% ---> Forecast 1.5%
Thursday, January 2
Great Britain 9:30 Universal time - Manufacturing PMI (Dec): Prev 47.4 ---> Forecast 47.6
Friday January 3
Great Britain 9:30 Universal time - Index of business activity in the construction sector (Dec): Prev 45.3 ---> Forecast 45.7
USA 15:00 Universal time - Manufacturing PMI (ISI) from December (Dec): Prev 48.1 ---> Forecast 49.0
Further development
Analyzing the current trading chart, we see that there was a surge at the start of the European trading session, locally tossing the quote to the area of 1.3045. In fact, we received a local influx of trading volumes after a three-day absence of Europeans and British in the market. This is exactly where the hand of speculators is clearly visible, where a jump is literally visible from scratch. So, you can focus on not the best statistics for the States, which was yesterday, but this seems to be far-fetched.
By detailing the time segment that we have every minute, we see that the price jump occurred in the period 05:30-7:00 [UTC+00 time on the trading terminal]. The structure of the candles displays impulses, which is characteristic of speculative operations. We can already confirm our theory on the next candle, which tries to quickly restore the quote, reflecting the fixation of previously received profit.
In turn, large traders are still out of the market, and speculators work at minute intervals, tracking stagnation / pullbacks to identify future impulses.
Having a general picture of actions, it is possible to say that if you are not ready to trade in a thin market, then it is better to return to trade next year. If you are a speculator and know how to control risks, then now is the right moment to jump in impulses. The task is to identify small stagnation and pullback. After that, we analyze the impulse with respect to them and work in a small inertial stroke towards the impulse.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators on the minute and hour intervals jump after speculative positions, having a share of ambiguity. Meanwhile, medium-term segments still maintain a downward interest, reflecting an earlier decline.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(December 27 was built taking into account the time of publication of the article)
The current time volatility is 78 points, which is a high indicator for this time section. It is likely to assume that if speculators manage to maintain their current mood, then the volatility may still grow a little, but still remain below the average.
Key levels
Resistance Zones: 1.3000; 1.3180 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 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
