29.10.201915:35 Forex Analysis & Reviews: Trading recommendations for the EURUSD currency pair – placement of trade orders (October 29)

The slowdown in volatility for the second trading day in a row worries market participants, and whether it is as bad as it may seem, we will try to understand in the current article.

From technical analysis, we see the so-called rollback that occurred when the support level of 1.1080 was touched, where the quote almost immediately worked it out, but at the same time showed low volatility. This kind of restraint signaled that sellers were still in the market, and in some way, there was a process of regrouping trading forces. Thus, the volatility, which was extremely low for two trading days (49 and 30 points), reflected the mood of market participants and the attitude to the very rebound from the level of 1.1080. Let me remind you that the oblong correction, paired with the inertial course, overheated long positions, and when there was a chance to restore the quotation, many clung to it. To summarize, open the H4 chart, you will take away a fairly healthy beat (October 21-28) in the intermediate movement and the current rollback was in place. All of the above applies to the theory of restoration of the initial course.

Analyzing the hourly past day, we see a pullback with a rather sluggish oscillation, where the most remarkable candles were only at the time of the period 13:00-14:00 hours (time on the trading terminal), which coincides with the information background. The subsequent swing was in terms of a narrow movement around the mark of 1.1100.

As discussed in the previous review, speculators were working on a local rebound, which, in principle, was possible, although the yield was not so great. The main deals were considered in terms of further recovery, but after fixing the price below 1.1070, which never happened.

Considering the trading chart in general terms (daily period), we see a real chance of restoring the original movement, where the quote has already formed one of the stages of the move when it approached the level of 1.1080. The further recovery process will occur at the time of the passage of the level of 1.1080, where the next coordinator will be the psychological level of 1.1000, which will display 60% of the working out relative to the oblong correction. Let me remind you that the oblong correction did not disrupt the overall market tact of the downward trend, and the chance of recovery is still high.

The news background of the last day did not have strong statistical indicators for Europe and the United States, thus the main focus of market participants was on monitoring the information background.

So, the European Union nevertheless went to the next deferral of Brexit, having agreed on the deadline for Britain to leave the EU on January 31, 2020, with the amendment that England has every chance to quit earlier if they still manage to ratify the agreement.

On such positive news, British Prime Minister Boris Johnson asked the heads of EU countries to promise that there will be no further delays, no matter what happens.

"If the British Parliament would resist (holding early elections and approving the deal), then I would urge the EU member states to make it clear that further postponement – after January 31 – is impossible. There is enough time ahead to consider the terms of the transaction. I'm not letting the parliament just renew the membership in the European Union again and again," the letter of Boris Johnson says.

Today, in terms of the economic calendar, we have only data for the United States. So, indicators are published on pending home sales transactions, where they expect a decline from 2.5% to 1.4%. At the same time, the consumer confidence index will be released, which is slightly increasing from 125.1 to 128.0.

In terms of emotional and informational background, we see that many market participants are waiting for tomorrow's meeting of the Federal Committee for Open Markets, where they will announce the decision on the interest rate, and according to preliminary forecasts, they are waiting for its reduction. In terms of Brexit, the noise is almost constant, and you need to monitor it.

Further development

Analyzing the current trading chart, we see a perfect touch of the local minimum of 1.1073 (October 25), where the quote again found a foothold and made a local rebound. So, the fact that the quote again managed to go down below the level of 1.1080 and touch the local value, suggests that the recovery process is alive as ever and there is still a chance of further decline. In terms of volatility and the emotional component of the market, we still maintain a low level, but perhaps it will only benefit the current tact, which, in principle, we have now.

Detailing the available time interval per minute, we see that almost from the very beginning of the day the process was going on. The return of the quotation to the limits of the previously developed level, without showing sharp fluctuations and only in the interval 12:30-13:00 (time on the trading terminal), there was a local surge just at the moment of approaching with a minimum of the previous loss of 1.1073. Perhaps the surge is due to local fixation of short positions at the moment of approaching with a value of 1.1073.

In turn, speculators are waiting for a clear price fixation lower than 1.1070, as this could signal a resumption of the downward course.

It is likely to assume that the fluctuation within the level of 1.1080 may be delayed for some time, and there it is already worth monitoring the price-fixing points. The best technique in this segment can be wait-and-see, where we monitor the price-fixing below 1.1070, working on short positions. The alternative scenario is considered in terms of another rebound from the level of 1.1080, but the main transactions are better analyzed in terms of a failure of the recovery process and fixing the price higher than 1.1110-1.1120.

Based on the above information, we derive trading recommendations:

• Buy positions are considered in the case of the passage of the 1.1110-1.1120 section, with the maintenance of inertia. If you consider speculative trades, then, in principle, you can work on a local pullback from 1.1080, but the risk exceeds the income.

• We consider selling positions in the case of a clear fixation of the price lower than 1.1070, not a puncture shadow.

Indicator analysis

Analyzing different sector timeframes (TF), we see that the indicators in the short term worked on the fulcrum, showing a variable signal to buy. The intraday outlook is focused on the recovery process, which reflects the reality of the market. The medium-term perspective still can not get off the earlier inertial course, but there is progress. Look at the indicators, we are smoothly changing the mood, which is already good.

Volatility per week / Measurement of volatility: Month; Quarter; Year.

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(October 29 was built taking into account the time of publication of the article)

The volatility of the current time is 29 points, which is the average for this period. It is likely to assume that if the stagnation is formed again with a rebound from the level of 1.1080, no drastic changes will occur, thus the volatility will be extremely small. In the case of the passage of the key level and the preservation of the inertial push, we can see an acceleration in terms of volatility.

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***; 1.0900/1.0950**; 1.0850**; 1.0500***; 1.0350**; 1.0000***

* Periodic level

** Range level

*** Psychological level

***** The article is based on the principle of conducting transactions, with daily adjustments.