A surge in activity was observed, which returned the quote to its previous levels.
At the past trading week, the bearish mood continued, which broke April 6's low (1.0768) down. The lowest level acquired was 1.0727, where a slowdown occurred, which led to the formation of a technical correction. Traders, in a panic mood, perceived this situation as an opportunity to regroup trading forces, which led to short selling.
Regarding development, a local acceleration occurred, where the lows of the previous measure [April 7-20] was beaten by the price. This is a direct signal that the compression model is unstable and is nearing completion, and the break of the lower frame indicates that the upcoming movement is likely to be downward. Thus, the technical correction can be seen as a regrouping of trading forces and attracting new volumes, where April 6's low (1.0768) will not exert pressure, and the quote will calmly pass it in the direction of the main goal - 1.0636.
During Friday's trading session, short positions consolidated during the start of the European session. The lows were updated, reaching the level of 1.0727, and upward movement lasted until the closing.
In terms of volatility, acceleration occurred in the span of six trading days, which exceeded the average daily indicator by 13%
Details of volatility: Monday - 155 points; Tuesday - 183 points; Wednesday - 115 points; Thursday - 278 points; Friday - 166 points; Monday - 151 points; Tuesday - 234 points; Wednesday - 243 points; Thursday - 326 points; Friday - 194 points; Monday - 191 points; Tuesday - 160 points; Wednesday - 133 points; Thursday - 188 points; Friday - 194 points; Monday - 134 points; Tuesday - 127 points; Wednesday - 136 points; Thursday - 147 points; Friday - 91 points; Monday - 67 points; Tuesday - 142 points; Wednesday - 72 points; Thursday - 110 points; Friday - 33 points; Monday - 74 points; Tuesday - 84 points; Wednesday - 134 points; Thursday - 95 points; Friday - 80 pips; Monday - 55 points; Tuesday - 64 points; Wednesday - 82 points; Thursday - 90 points; Friday - 101 pips. The average daily indicator, relative to the dynamics of volatility,
In the previous review , we suggested shorting the EUR / USD pair towards the values of 1.0700–1.0636, but did not say if it will succeed.
Looking at the daily chart, the downward movement is consistent, which confirms the theory of downward development.
Friday's news contained March's data on the volume of orders for durable goods in the United States, where a decline of -14.4% was recorded, worse than the forecast of -11.9%.
The news was published at 13:30 (London time), but the main dynamics went much earlier, making it hard to say that it caused the dollar's decline.
Regarding the coronavirus situation, in the next few hours, the total number of coronavirus cases in the world may pass 3 million. Economic indicators are beginning to receive signals about the consequences of the pandemic, which scares, without exception, all investors. So, during a video message, Germany Chancellor Angela Merkel urged EU countries to unite even more, and said that as part of the program to stimulate the EU economy, Germany will invest more than what was planned in the general budget.
Meanwhile, France President Emmanuel Macron expressed dissatisfaction with the recent EU summit results. According to him, the current EU economic assistance on coronavirus is insufficient.
The program aimed for economic recovery was approved as early as April 23. It was worth € 540 billion and includes three insurance programs aimed at supporting business and workers.
In the US, economic adviser Kevin Hassett commented on the unemployment situation, calling it very difficult, and claiming that it will reach no less than the scale during the Great Depression.
Hassett compared that in 2008, 8.7 million people were unemployed in the United States. Now, we are losing a comparable number of jobs every ten days.
No important economic data from Europe and the US will come out today.
Further development
Another concentration at the mirror level of 1.0850 was observed, where the quote is still at the stage of technical correction. The quote jumped more than 120 points, which is a lot even for such an active market as it is now. There are assumptions that the quote will pay particular attention to the range of 1.0815 / 1.0885, that is, repeating the amplitude of April 16-20.
The bearish mood still persists, which could soon lead to the descent at the values of 1.0700–1.0636
Meanwhile, similar to the GBP / USD pair, long positions arose in the minute time frames during the Asian sessions. Thus, uncertainty is present.
A temporary fluctuation may occur within the boundaries of 1.0815 / 1.0885, as market participants will continue focusing on the mirror level of 1.0850. For local operations, acceleration at 1.0833 / 1.0860 will break the boundaries down.
Based on the above information, we came up with these trading recommendations:
- Sell short positions in several stages: first at below 1.0833, towards 1.0815 (local position); second at below 1.0810, in the direction of 1.0775-1.0735; third at below 1.0700, towards 1.0636.
- Buy long positions above 1.0860, towards 1.0885.
Indicator analysis
A bullish mood is brewing on the hourly and minute periods. Meanwhile, the bearish mood continues in the daily time frame.
Volatility per week / Measurement of volatility: Month;
Quarter year
Volatility measurement reflects the average daily fluctuation calculated per Month / Quarter / Year.
(April 27's was built, taking into account the time of publication of the article)
Current volatility is 48 points, which is 46% lower than the average daily value. Activity may still increase, and accumulation within the level of 1.0850 may contribute to it.
Key levels
Resistance zones: 1.0850 **; 1,1000 ***; 1.1080 **; 1,1180; 1.1300; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support areas: 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1,0500 ***; 1.0350 **; 1,0000 ***.
* Periodic level
** Range Level
*** Psychological level
