The weakening of dollar positions throughout the market led to the fact that the pound consolidated above the level of 1.2620 once again, signaling intentions to return the quote to its original resistance point in the form of a range level of 1.2770, but is it really so?
The characteristic instability of the external background, as well as speculative excitement, creates local leaps in the market, which lead to touching and breakdown of important price values, but does not create the basis for radical changes. Price consolidating above the range of 1.2620 indicates a purchase, but also indicates that we are dealing with an inertial move that is considered not saber and can complete as quickly as it originally appeared. Thus, at this stage, being extremely careful is necessary, since a return of price lower than 1.2620 instantly activates a round of short positions, followed by speculative excitement.
The news background of the past day was indecently empty, statistics were not available both in Britain and in the United States, but, as we see, this fact did not stop speculators.
In terms of informational background, we have a telephone conversation between Prime Minister, Boris Johnson and German Chancellor, Angela Markel regarding the long-playing Brexit. So, at the beginning, Johnson, by tradition, said that London could do without a deal if the European Union is not ready to go to a meeting, to which Merkel responded with a mirror step. But then chief negotiator of the EU Brexit Michel Barnier said that the EU is ready to soften its position on the negotiations on fisheries in United Kingdom waters after Brexit, and this is already a positive signal, since the "fish issue" was that stone of stones, which does not go with the negotiations.
Today, in terms of the economic calendar, we have weekly data on the labor market in the United States, where we will publish indicators on the number of applications for unemployment benefits. Once again, we have a slight, but still a signal of recovery in the labor market, initial applications may decline from 1,427,000 to 1,380,000, and the number of repeat applications may well decline from 19,290,000 to 19,200,000.
It is entirely possible that this will support the US dollar, but only if the data comes out slightly better than expected.
In terms of general informational background, we continue to monitor the flow of news related to Brexit, as it is it that is a stimulus for speculative interest. You can also study the minutes of the Bank of England committee on monetary policy.
Great Britain 8:30 Universal time - Minutes of the meeting of the Bank of England Committee on financial policy.
USA 12:30 Universal time - Applications for unemployment benefits.
From the point of view of complex analysis, we see the retention of quotes above the range of 1.2620, which indicates the prevailing volume of long positions. In this case, it is worthwhile to carefully analyze the behavior of quotes for shorter time periods (M15 and M30), identifying local slowdowns with respect to which a signal of completion of inertia may appear.
The burning forecast is that we will work on two fronts at once, the first is responsible for the local retention of long positions, trying to maximize profit from inertia. The second front analyzes the slowdowns, against which we will apply the "shifter" position method, which will resume the downward move.
Based on the above information, we derive trading recommendations:
- Consider buying deals above 1.2650. The output is made relative to the analysis of decelerations in periods M15 and M30.
- Sale deals will depend on a number of factors, if, for example, a slowdown occurs at current values, then the best entry point is around 1.2600, towards 1.2500. If the inertial stroke is held, then we monitor the subsequent stops above 1.2650, working according to the "shifter" method.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the performance of technical tools relative to the minute, hour and day periods signal a purchase, due to price consolidation above the range of 1.2620.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the daily average fluctuation, calculated for the Month / Quarter / Year.
(July 9 was built taking into account the time of publication of the article)
The volatility of the current time is 49 points, which is 58% lower than the daily average. It can be assumed that against the background of speculative activity, volatility will continue to grow.
Key levels
Resistance zones: 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support zones: 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411); 1.1300; 1.1000; 1.0800; 1.0500; 1.0000.
* Periodic level
** Range Level
*** Psychological level
