Over the last trading day, the euro/dollar currency pair showed high volatility of 85 points, as a result of which the quote rushed to the base point of the prolonged oscillation. From technical analysis, we see that the theory stated in the previous review coincided with 100%. The stagnation within the psychological level of 1.1000 did not last long, and there was a massive downward move in the afternoon, which was called as the inertial impulse. The movement was really beautiful, and most importantly – profitable, the price almost reached the base point of 1.0927, where there was a slight stagnation/pullback within 1.0937, just in time for the Pacific-Asian trading session.
As discussed in the previous review, speculators were at a low start in terms of short positions, some entered the transaction already from the psychological level of 1.1000, others with a slight delay in the coordinates of 1.0980 and 1.0960, but all without exception made a profit.
Looking at the trading chart in general terms (daily period), we see that the recovery process has led us to the key coordinate of 1.0927, where repeatedly there was a stop followed by a rebound. Now, the question is whether sellers will be able to overcome this ill-fated coordinate and resume the initial downward trend or whether the long-playing toffee [1.0927/1.1000/1.1080(1.1115)] will also last for the fourth week.
The news background of the previous day had data on sales of new homes in the United States, where, in principle, expected growth, but the result was even more beautiful picture. So, the previous data was revised for the better 635K to 666K, and the current figures were 713K with a forecast of 660K. Such a positive statistic left in the treasury, and so growing as the leverage of the American dollar.
The information background did not stand still and pleased speculators' hysterical flow of information regarding the impeachment of US President Donald Trump. If we analyze this burning story briefly, then on Tuesday (September 24), US House Speaker Nancy Pelosi announced the start of the impeachment proceedings against Donald Trump, citing alleged intelligence and the scandal surrounding Trump's telephone conversation with Ukrainian President Vladimir Zelensky. The "family", intra-American squabbles of Trump and Biden have reached a new level, where both are trying to measure political forces, but it's still not clear what all this will lead to, but I think the next fiasco in terms of attacks on Trump and further transfer of discussion to the sidelines of the ruling elite.
How the US dollar reacted to all this show is surprising, but positive, which is hard to explain in terms of logic. Most likely, Trump played a certain openness in terms of actions, who declassified the transcript of a telephone conversation with Zelensky and is ready to participate in this show, and he has plenty of experience, like a showman.
Today, in terms of the economic calendar, we have data on US GDP for the second quarter, where they are waiting for confirmation of a slowdown in economic growth from 2.7% to 2.3%, which may put local pressure on the US dollar. In terms of informational background, further clarifications of the hysterical data stream regarding the battles of Trump & Biden are awaiting. We follow the news feed.
Further development
Analyzing the current trading chart, we see how the quote comes close to the key value of 1.0927 while drawing an impressive candle. Now, the important question is whether we will be able to push the coordinates (of 1.0927) not just in the form of puncture and to keep the inertial speed. Speculators, in turn, are insured and try to bury the available short positions as much as possible, since, in the case of a rebound, the work will be built in a completely different perspective, where there will also be enough profit. Short positions are not removed in a distant suitcase, as their consideration and further entry will be made in the case of fixing the price below 1.0900.
It is likely to assume that the current day will be no less interesting and volatile at the same time, where the tactics of two interests are actively considered, that is, the "Breakdown/Rebound" method. That is, analyze the behavior of quotes within the control point (of 1.0927), at the same time we study the news feed and make a decision – Breakdown or Rebound.
Based on the above information, we will derive trading recommendations:
- Buy positions are considered in the case of fixing the price higher than 1.0966, with the prospect of a move to 1.1000. The entry point may be revised in the case of a distinct form of the slowdown, concerning which it will be possible to enter the market.
- Positions for sale are considered in the case of a clear fixation of the price below 1.0900 while maintaining the inertial course.
Technical analysis
Analyzing different sectors of timeframes (TF), we see that the indicators in all major time intervals retain downward interest due to the general background and inertial movement. If the fulcrum in the area of 1.0927 is still found, the indicators in the smaller time sections will quickly change their interest.
Volatility per week / Measurement of volatility: Month; Quarter; Year.
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 26 was built taking into account the time of publication of the article)
The volatility of the current time is 31 points, which is more than 50% of the daily average. It is likely to assume that due to the information and news background, volatility will still show itself, exceeding the daily average.
Key level
Resistance zones: 1.1000***; 1.1100**; 1.1180* ; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100
Support zones: 1.0926*; 1.0850**; 1.0500***; 1.0350**; 1.0000***.
* Periodic level
** Range level
*** Psychological level
**** The article is based on the principle of conducting transactions, with daily adjustments.
