From the point of view of a comprehensive analysis, we see another price fixing below the psychological level of 1.3000, and now, let's talk about the details. After a peculiar correction move, the quote moved to the accumulation stage, where the interaction points became the values of 1.3000 / 1.3068. The oscillation lasted about 2.5 days, where something similar to a double top was formed in the end with a price fixation below 1.3000. As we understand, the psychological level [1,3000] no longer plays the role of a strong support, as it was a period earlier. Moreover, the clock frequency has changed, and the main points of interaction are lower which is particularly in the region of 1.2885 and 1.2770.
Regarding the theory of the downward movement, we are expecting an initial fluctuation in the region of 1.2885 / 1.3000, which will reflect a peculiar price fixing below the previous measure. The main signal about the resumption of the downward movement and the onset of the recovery phase relative to the medium-term trend will begin from the moment the price fixes below 1.2770. You probably already guessed that the prospect of a coincidence of the theory is by no means small, but all this takes time and you should not wait for a quick profit, as is often seen with FOMO syndrome [Syndrome of lost profit], where there is movement, but not stability.
In terms of volatility, we see a slowdown even more than the day before 62 ---> 56 points, but at the same time, speculative interest remains on the market. Thus, it is worth considering that the acceleration in this case can be expressed as the achievement of the average daily indicator, which would already be enough until a stable cycle.
Details of volatility: Thursday - 79 points; Friday - 79 points; Monday - 74 points; Tuesday - 74 points; Wednesday - 44 points; Thursday - 125 points; Friday - 62 points; Monday - 56 points. The average daily indicator relative to the dynamics of volatility is 93 points [see table of volatility at the end of the article].
Detailing minute by minute, we see that the main downward movement occurred at the beginning of the European trading session. The subsequent movement was in terms of residual, which concentrated the price in the region of the psychological level of 1.3000.
As discussed in the previous review, traders with strategic positions adhered to the same pattern, holding deals in terms of medium-long-term progress. At the same time, the level of 1.3000 played an important role, where intraday traders considered entering the market in case of price fixing.
Considering the trading chart in general terms [the daily period], we see that the medium-term trend has signs of a change in trading interests, but only a price fixing field lower than 1.2885-1.2770 will appear to confirm this.
The news background of the previous day did not have statistical data, and trading volumes were reduced due to the absence in the United States market that marked Presidents Day.
In terms of general informational background, we continue to analyze the noise regarding the upcoming negotiations on Brexit, where the British negotiator David Frost gave his comments this time. So from an excerpt from Frost's speech, it becomes clear that London does not plan to follow the rules and regulations of the European Union, but insists on equal rules of the game.
"If the EU really wants to build strong and long-term relations with us in this extremely difficult area, as our friends in the European Commission and 27 countries of the community tell us, the only possible approach is to build them on an equal footing," said David Frost.
In addition, Frost cited an allegory of how you would feel if Britain demanded that the EU begin to harmonize its laws with our national laws established in Westminster and the decisions of our regulators and courts to protect its interests. He believes that such an approach by the European Union would undermine the sovereignty of the United Kingdom and the legitimacy of the British government.
Today, in terms of the economic calendar, we have data on the labor market in Britain that do not expect to be the best. So, most indicators should remain unchanged, but the average level of wages should decrease: excluding premiums from 3.4% to 3.3%; including premiums from 3.2% to 3.0%. At the same time, we have not the best data on changes in employment, as well as on the number of applications for unemployment, which does not give the best signal for the pound sterling.
Further development
Analyzing the current trading chart, we see the price concentration below the psychological level of 1.3000, where the fixation has already been made. In fact, a signal of a possible resumption of the downward movement has been received, but do not forget that fluctuations along the level of 1.3000 are not excluded, and the local perspective is 1.2960. If we focus on the prospects of a week or two, then we should focus on the values of 1.2885-1.2770. At the same time, the medium term is waiting for price fixing lower than 1.2770 to extend the existing positions.
From the point of view of the emotional mood of the market participants, we have already noticed that changing the clock component has already brought us a lot of interest, and most likely this has just begun, we will still have time to catch the FOMO [lost profit] syndrome, as well as stability.
By detailing the per-minute portion of time, we see characteristic jumps of activity at the start of the European session, where the price locally jumped up and down relative to the level of 1.3000.
In turn, the tactics of medium-term traders remained unchanged. They are focused on a significant decrease, and the points of confirmation of their judgment will be the values of 1.2885 and 1.2770. Intraday traders are now considering a local decline towards 1.2960.
Having a general picture of actions, it is possible to assume that the theory of downward development is still relevant among market participants, where its development should take place sequentially without undue surge in order to create stability and steady progress.
Based on the above information, we derive trading recommendations:
- Local purchase positions were already considered in case of price fixing higher than 1.3001, towards 1.3030-1.3050.
- Positions for sale are already being conducted by traders in the direction of the level of 1.2885-1.2770, a conservative volume per transaction. In turn, intraday operations are designed to decline towards 1.2960.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that indicators relative to all the main periods renewed the sell signal, after fixing the price below the psychological level of 1.3000.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(February 18 was built taking into account the time of publication of the article)
The volatility of the current time is 21 points, which is a low value for this time section. It is likely to assume that we can see a local increase in activity due to a package of statistical data on Britain, which will affect volatility.
Key levels
Resistance Zones: 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 1.2900 *; 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
