From a comprehensive analysis, we see a characteristic slowdown relative to the early inertial course. Now about the details. 435 points – this is how much the quote managed to fly to the first impressive stagnation, where the values of 1.1100 and 1.1180 became the time frames. In fact, overbought has not gone away, however, this mess has added a large-scale uncertainty caused by the information background – in particular, the actions of the Federal Reserve System. It turns out that the market fell into a trap of emotions, where the FOMO syndrome was already raging. Altogether, it leads the market to instability, where the existing stagnation is a conditional "bomb" that can lead to local jumps.
As mentioned in previous reviews, it is not necessary to focus on the main trends now, since the noise is so great that market fluctuations work exclusively on it and even sometimes across the entire logic. Naturally, this will not last forever, however, it is worth taking measures with the existing circumstances and working together with the accumulated data.
In terms of volatility, we see a slight slowdown on the scale of recent days, since even the last daily candle exceeds the daily average by 64%.
Volatility details: Thursday-127 points; Friday-102 points; Monday-152 points; Tuesday-118 points; Wednesday-92 points. The average daily indicator, relative to the dynamics of volatility – 55 points (see the volatility table at the end of the article).
Analyzing the past day by the minute, we see a full cycle of movement from the level of 1.1180 to the variable value of 1.1100. After that, 1.1100 is worked out, followed by a slowdown.
As discussed in the previous review, traders were waiting for more activity and going beyond the established limits. However, the market still could not move further than 1.1100, thus short positions received income in the area of 40 points.
Looking at the trading chart in general terms (the daily period), we see that there are no significant changes relative to global trends at this time, and the existing inertial course is an unstable structure.
News background of the past day had the ADP report on employment in the United States, where the data was better than expected. However, in comparison with the previous period, we still observe a decrease from 209,000 to 183,000. The market reaction was already in the background, as the foreground noise is the general background.
In terms of the general information background, we have a wave of panic caused by the actions of the Fed, where the ECB and the Bank of England can take similar measures. So, according to rumors, the Bank of England is already planning to organize an unscheduled meeting, and the ECB is considering a rate cut of 10 basis points, which will lead to negative values. The fact that such rapid changes in monetary policy in several central banks at once leads to noise, fear and uncertainty among investors and traders.
Today, in terms of the economic calendar, we have data on applications for unemployment benefits in the United States, where a slight increase of 5,000 is expected: Primary +1thousand; Repeated +4 thousand.
At the same time, the first round of negotiations between Britain and Brussels on post-Brexit trade interactions is coming to an end today, where interesting comments may appear.
Further development
Analyzing the current trading chart, we see that the quote once again approached the level of 1.1180, where it felt a kind of pressure and, as a fact, slowed down the movement, forming a rebound. In fact, the movement in the conditional range of 1.1100/1.1180 remains on the market for as long as 60 hours, which once again confirms the characteristic uncertainty among market participants, where it is necessary to prepare for new jumps.
In terms of emotional mood, we see that the FOMO syndrome has reduced the appetite, but at the same time, the coefficient of speculative operations is breaking new records, and this is confirmed by the existing activity.
Detailing the available period every minute, we see that the round of long positions occurred during the period of 10:30-11:45, during which the convergence with the level of 1.1180 occurred.
In turn, traders temporarily work within the range of 1.1100/1.1180, but the main tactic is to break it, where they expect the greatest return.
It is likely to assume that the movement within 1.1100/1.1180 will still remain in the market, where a return of the quote in the direction of 1.1145–1.1100 is not excluded. If you refer to the noise and the risk of a possible ECB rate cut, paired with a huge overbought, then short positions automatically become a priority.
Based on the above information, we will output trading recommendations:
- Buy positions are considered if they are fixed higher than 1.1230 and exit above the peak on December 31 (1.1240). The outlook is towards 1.1280-1.1300.
- Sell positions are considered towards the lower limit of the range of 1.1100 in case of fixing lower than 1.1145. The main deals will come after breaking the mark of 1.1100 and fixing the price below 1.1080.
Indicator analysis
Analyzing different sectors of timeframes (TF), we see that the indicators of technical instruments are focused on the upward course, where the daily periods make reference to the inertial course, but the minute and hour periods work exclusively on the range of 1.1100/1.1180.
Volatility for the week / Volatility Measurement: Month; Quarter; Year.
The volatility measurement reflects the average daily fluctuation from the calculation for the Month / Quarter / Year.
(March 5 was based on the time of publication of the article)
The current time volatility is 58 points, which is already 3% higher than the daily average. It is likely to assume that the acceleration will still persist in the market due to the massive noise and fear of investors.
Key levels
Resistance zones: 1.1180; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.
Support zones: 1.1080**; 1.1000***; 1.0950**; 1.0850**; 1.0775*; 1.0700; 1.0500***; 1.0350**; 1.0000***.
* Periodic level
** Range level
*** Psychological level
***** The article is based on the principle of conducting a transaction, with daily adjustments.
