From the point of view of complex analysis, we see an intense downward movement, which returned the quote to the level of 1.2440, and now let's talk about the details. The quote sequentially increased for six consecutive trading days, eventually reaching the resistance level of 1.2620, but the quote failed to stay at new highs. After that, we saw an intensive downward movement where the quote immediately returned to the level of 1.2500, which reflected the upper border of the flat a period earlier, and then completely declined to the level of 1.2440, leaving behind a series of impulse candles. In fact, we were faced with an impressive speculative interest, which, in a general panic, developed quite a significant activity in the market.
Regarding the theory of further development, it is too early to talk about a full continuation of the downward movement, since the quote, although it has rebounded by several hundred points, is not enough for a resumption signal. Thus, in order to receive this signal, the quote needs to return to the area of the level of 1.2150, and only then the discussion of the possible downward development will resume. Until this happens, the quote will continue to be in an upward turn.
Analyzing the past day in detail, we see that the main acceleration of the downward positions occurred at the start of the European session, and it lasted until the Americans entered the market. With this fluctuation, the minimum value was 1.2437, where the quote stopped and formed a rebound towards 1.2572, but after which, the downward interest resumed again.
As discussed in the previous review, traders were working on a downward move from the level of 1.2620, which brought significant income to the deposit.
Wednesday's recommendation to work from the level of 1.2500 also brought income – both for sale and for purchase.
[Buying positions are considered higher than 1.2530, with the prospect of a move to 1.2575 -1.2620; We consider selling positions lower than 1.2470, with the prospect of a move to 1.2440 -1.2400.]
In terms of volatility, we see the first acceleration in five trading days, which exceeded the average daily value by 13%. In fact, speculative interest, paired with an emotional mood, still prevails among market participants.
Details of volatility: Monday - 165 points; Tuesday - 245 points; Wednesday - 172 points; Thursday - 358 points; Friday - 359 points; Monday - 144 points; Tuesday - 271 points; Wednesday - 676 points; Thursday - 354 points; Friday - 522 points; Monday - 267 points; Tuesday - 296 points; Wednesday - 333 points; Thursday - 452 points; Friday - 352 points; Monday - 148 points; Tuesday - 227 points; Wednesday - 108 points; Thursday - 126 points; Friday - 198 points; Monday - 116 points; Tuesday - 217 points; Wednesday - 131 points; Thursday - 122 points; Friday - 42 points; Monday - 87 points; Tuesday - 146 points; Wednesday - 193 points. The daily average, relative to the dynamics of volatility, is 170 points [see the table of volatility at the end of the article].
Considering the trading chart in general terms [the daily period], we see the outlines of the V-shaped model, which is already at the final stage.
The news background of the past day contained data on retail sales in the United States, where the March figures were not just bad, they were terrible. They predicted a decline of -2.0%, as a result, the decrease was -6.2% in annual terms. In addition, data on industrial production in the United States was published, and here, there was a decline of -5.5% again with a forecast of -1.5%
The reaction of the market to macroeconomic statistics was across the fundamental analysis. At first, the US dollar stubbornly strengthened, and then locally adjusted, but the position on the dollar still remained.
In terms of informational background, we had a very interesting rumor regarding the extension of the transition period for Brexit. So, an insider began to walk among European banking analysts that there were allegedly discussions about a possible delay in connection with the difficult situation in the world.
In turn, another virtual meeting of the Brexit negotiating group was held, where the heads of the British and EU delegations agreed to resume negotiations on the conditions for the final exit of Britain, which were interrupted due to the coronavirus pandemic, in the format of video conferences Therefore, Michel Barnier from the European side agreed with David Frost to conduct the following three rounds of negotiations: in April, May and June - each week.
"We need real, tangible progress in the negotiations until June. We need to move forward in all areas," Michel Barnier tweeted.
It can be recalled that in early April, German Ambassador to the EU Michael Clauss wrote a letter to Berlin regarding all these virtual meetings and Brexit negotiations - "Video conferences, even when they can be held, cannot replace face-to-face meetings. There is no formal quorum, no in-field conversations, nor confidentiality of negotiations. Moreover, there are difficulties in working with texts."
We can draw our own conclusions, but the outcome of these video meetings already has its own outlines.
Today, in terms of the economic calendar, we have the next data on applications for unemployment benefits in the United States, which are waiting for new anti-records. So, the initial applications may amount to 4 720 000, but the repeated applications are already 10 500 000.
Say what you like, these are terrible indicators for the US labor market, but investors assess the situation in the world in general terms, thus it is not a fact that the dollar will be under pressure.
Further development
Analyzing the current trading chart, we see amplitude fluctuations within the level of 1.2500, where the quote is inside the rebound of the past day 1.2440 / 1.2572. It can be assumed that the fluctuation in variable levels [1.2440 / 1.2572] will remain in the market for some time, where it will become clear how much investors are interested in the dollar as a protective asset.
Analyzing the time segment by the minute, we can see that downward interest prevailed during the Pacific and Asian sessions, dropping the quote to the level of 1.2460, bu, a rebound to the level of 1.2500 was formed at the start of the European session.
In terms of the emotional mood of market participants, we see that the coefficient of speculative positions resumed growth.
Based on the above information, we derive trading recommendations:
- We consider buying positions higher than 1.2520, with the prospect of a movement to 1.2550 - 1.2570. The main movement is considered higher than 1.2580, with a return to the level of 1.2620.
- We consider selling positions lower than 1.2457, with the prospect of a move to 1.2540. The main movement is already lower than 1.2430, with the prospect of movement to 1.2400 - 1.2350.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the hourly periods took a downward position due to the return of quotes below the level of 1.2500. Meanwhile, daily areas still retain a buy signal due to the fact that the quote is still at high levels.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for Month / Quarter / Year.
(April 16 was built taking into account the time of publication of the article)
The volatility of the current time is 66 points, which is another 61% lower than the daily average. It is worth considering that activity can continue to increase, approximately by + 40% - + 70% due to the upcoming statistics, as well as to the continuing speculative interest.
Key levels
Resistance Zones: 1.2500; 1.2620; 1.2725 *; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support areas: 1.2350 **; 1.2280 (1.2240); 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
**** The article is built on the principle of conducting a transaction, with daily adjustment
