Over the past trading day, the pound / dollar currency pair showed a reduced volatility of 78 points, but it is worth paying tribute to the fact that all this fluctuation was directed towards recovery. From the point of view of technical analysis, we see that the rapid upward movement directed to the correction phase reached the coordinate 1.2292, where the quote felt a periodic ceiling in front of itself, and went into the recovery phase, returning us to the previously designated control point 1.2200. If we take a closer look at the measures, we will see that the restoration returned us to the limits of August 23, that is, to the very coordinates where the restoration process was already underway, and the past jumps are local bursts exclusively against the background of the information flow, nothing to do with the general mood they do not have a market.
As discussed in the previous review, conservative traders entered the waiting phase again until the quote returned to the limits of accumulation. Speculators, in turn, do not sit still and have already opened short positions in the direction of the level of 1.2200, which turned out to be the right step in terms of restoring quotes. Considering the trading chart in general terms (daily timeframe), we see that the "Correction" beat is still on the market, having about 25% recovery relative to the current beat. The main support point is located within the psychological level of 1.2000 (+/- 20p), restraining the main trend.
The news background of the past day contained data on orders for durable goods in the United States, where we have seen growth for the second month in a row, which, of course, is a good sign in terms of the future dynamics of industrial production and retail sales. Relative to the current data, acceleration is up to 2.1%, with a forecast of 1.1%. Whether we like it or not, the positive data for the States supported the dollar in the recovery phase.
On the other hand, information background on Monday calmed down in some way after a stormy Friday, and the Fed's head's speech at the Jackson Hole symposium comes to a conclusion. In turn, British Prime Minister Boris Johnson set out to blackmail Europe, saying that in the event of a hard Brexit, Brussels will receive 9 billion pounds of compensation, instead of 39 billion pounds. This, of course, is better than nothing, but Johnson's position of hopelessness is increasingly visible on the world stage. This uncertainty in the actions of the British government is clearly felt in their "skins" by British companies that are already leaving the country in batches. According to the Netherlands Foreign Investment Agency (NFIA), about 100 British companies have already moved to the Netherlands and 325 plan to do so. Information about that investment and business are flowing out of the United Kingdom has been known for more than a month, and the head of the Bank of England, Mark Carney, has repeatedly pointed out this point. Once again, we see signals of an aggravation of the situation in Britain, and the time until day "X" remains less and less. How much support for the pseudo-background is for the pound sterling and whether Mark Carney's forecast of parity will come true.
Today, in terms of the economic calendar, we have data on the volume of approved UK mortgage loans, where there is an increase from 42.653K to 42.800K, which may provide temporary support to the pound. This afternoon, S & P / Case-Shiller data on housing prices in the United States, which are projected to remain unchanged, will be released.
Further development
Analyzing the current trading chart, we see that there is a test price surge in the region of the previously found resistance point, which is most likely, against the background of the next information flow and the return of the British after the weekend, Monday. Traders, in turn, are not eager for hasty action, since in order to assess the upward trend, the quote must go above the local peak on August 23, 1, 2292.
It is likely to assume that only the fluctuation is visible within 1.2200 / 1.2260 so far, with a focus on the peak of 1.2292. The quotation can go higher until I'm sure of it, and the information background is still empty to understand the essence of what is happening. In general, there is a very similar maneuver for throwing out weak hands. But in this case, the reverse process of returning the price to 1.2200 should begin in the afternoon.
Based on the above information, we derive the following trading recommendations:
- We consider buying positions in case of a clear price fixing higher than 1.2300, preferably with the support of the information background.
- We consider selling positions in case of price fixing lower than 1.2200, with the prospect of a move to 1.2170-1.2150.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators are quite versatile by themselves. Short-term gaps reflect the current surge in prices, (ascending mood). Intraday, on the contrary, are focused on the recovery phase of quotes, (descending mood). Meanwhile, the medium-term outlook is in the correction phase (ascending mood).
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(August 27 was built taking into account the time of publication of the article)
The current time volatility is 43 points. It is likely to assume that if the theory of amplitudes is confirmed, the volatility will be clamped within the daily average. At the same time, it's worth a little while to wait for the information background to appear, it will probably help us understand what is happening.
Key levels
Resistance zones: 1.2350 **; 1.2430; 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1.3300
Support areas: 1.2150 **; 1,2000; 1.1700; 1.1475 **
* Periodic level
** Range Level
*** The article is built on the principle of conducting a transaction, with daily adjustment
