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By the end of the last trading week, the pound / dollar currency pair showed volatility of 10 points lower than the average daily indicator. The fluctuation was 85 points. From the point of view of technical analysis, we see a very interesting amplitude oscillation, where the quotation for the time flew in the direction of 1.2558, but the day ended nevertheless within the confining point of support 1.2600 / 1.2620. Looking at the chart in general terms, we see that, as a beautiful quote, it did not draw pulsed candles, but as a result we remained at the pivot point 1.2600 / 1.2620. Open the daily chart and everything will fall into place. The general downward background for the British (GBP) did not disappear.
We turn to the information and news background and we see that the statistics on the United States were released on Friday: Revenues / Expenditures show an increase of 0.5% and 0.3%, respectively. In the short term, it smoothed out in the form of growth of the American currency, but then the dollar was under pressure from China's comments on the trade war.
What was said was that Chinese Deputy Foreign Minister Zhang Hanhui announced the use of economic terrorism and "protectionist bludgeons" by the United States to unleash trade wars against other countries. According to him, Beijing is categorically opposed to sanctions and provoking trade wars, which "are economic terrorism, chauvinism and harassment." The United States is still digesting all of the above, but I think the answer will not take long.
Returning to our beloved "divorce" process, we have a statement by US President Donald Trump, in which he said in an interview by Sunday Times that Britain is not worth paying the EU £ 39 billion for Brexit. Adding that the UK should get out of the European Union without a deal, if Brussels does not accept the terms of London, it literally sounded like - "If you don't get the agreement you want, just go away."
Let me remind you that Donald Trump has planned a trip to Britain this week, and this kind of "hard way out" propaganda will only grow.
Today, in terms of the economic calendar, we have data on business activity in the manufacturing sector (PMI) for May, where they expect a decline from 53.1 to 52.5. In the afternoon, there will be a similar indicator for the United States, where they expect a reduction of 52.6 to 50.6.
United Kingdom 11:30 Moscow time - Manufacturing Business Index (PMI) (May): Prev. 53.1 ---> Forecast 52.5
United States 17:00 MSK - Manufacturing PMI from ISM (May): Prev. 52.6 ---> Forecast 50.6.
Further development
Analyzing the current trading chart, we see that the quote is fixed above the pivot point 1.2600-1.2620, but still retaining the effect of magnetization. What are our next steps? - if the negative background in Britain, the connection with the Brexit confusion continues, then the probability of further reduction is still high, but there is no need to take premature actions.
Based on the available information, it is possible to decompose a number of variations, let's consider them:
- We consider positions for purchase higher than 1.2670, with the move prospect of 1.2700 (the first point).
- We consider positions for sale if we have not opened them before, then the entry point will be considered after a clear price fixing lower than 1.2600 on the daily chart.
Indicator Analysis
Analyzing the different sectors of timeframes (TF), we see that indicators in the short term have taken a neutral character, due to the bumpiness within the fulcrum. Intraday perspective changed interest to an upward link with a recent jump. The medium-term perspective maintains a downward interest on the general background of the market.
The downward plan was changed to an upward plan, due to the current stagnation. Intraday and mid-term perspective preserves downward interest against the general background of the market.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(June 3 was based on the time of publication of the article)
The current time volatility is 28 points. In case of stagnation within the pivot point, the volatility will be kept within the framework of the average daily indicator, which aims to decrease.
Key levels
Zones of resistance: 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700
Support areas: 1.2620; 1,2500 *; 1.2350 **.
* Periodic level
** Range Level
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