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From a comprehensive analysis, we see the heights at which the trend change is ringing. Now about the details. The week began with a loud gap - a size that exceeded the average daily candle (68 points). Buyers were already charged, but this did not seem enough for them. The upward movement resumed and in the area of the Pacific session, the quote draws a momentum towards the mark of 1.1500, having such high activity that the stops crunched unusually loudly. Holding the quote at the heights of 1.1440/1.1480 led to a wave of discussions about changing the medium-term trend, which had a real basis for implementation in terms of technical analysis. In a short period of time, the current circumstances in the world did not spare the market. Just in two weeks, the quote was able to do what at other times took a year. I don't think it's worth counting the fixed price at 1.1440/1.1480 as a reference point in the trend change. Such high speed, charged with information bursts, carries a local character and here we need not just fixing, but consistent development with news support.
Is it worth catching price trends now, or putting forecasts for the month ahead? I do not think so since the external noise is so great that speculators will literally not let you navigate in space. Now the most suitable method is to work on the noise and surge, that is, to become a speculator. It is worth considering that having a phenomenon with mega-activity is short-term. If you are not confident in your abilities, and this style does not suit you, it is better to sit out of the market.
In terms of volatility, we see that ultra-high indicators continue to please speculators, and the past day exceeds the daily average by 150%.
Volatility details: Monday-152 points; Tuesday-118 points; Wednesday-92 points; Thursday-125 points; Monday-155 points. The average daily indicator relative to the volatility dynamics is 62 points (see the volatility table at the end of the article).
Analyzing the past day by the minute, we see the same gap at the start, where the upward momentum is set. Already in the period of 3:30-3:45, there are ascending candles that lead us to the value of 1.1495. The subsequent oscillation had wide borders of 1.1370/1.1475, where everything ended at a concentration near the upper frame.
As discussed in the previous review, many traders entered long positions at the time of the breakout of the maximum on December 31 (1.1239). The first fixing point was in the area of the level of 1.3000 and the subsequent coordinates are 1.1400/1.1440.
Looking at the trading chart in general terms (the daily period), we see a vertical move, where locally flew to the levels of January last year. The exchange rate change is somewhat similar to 2017, but the activity is still higher.
The news background of the previous day included data on industrial production in Germany, where the decline has slowed, but we are still in a hole: Previous -5.3%; Current -1.3%.
The main driver of all the jumps was the collapse of the oil market, where the rate of a barrel, WTI fell below $30, and Brent fell to the area of $34. The reason for such a significant decline was the news that OPEC+ could not agree on a further reduction in oil production, and the existing agreement ceases to operate on April 1. Panic hit the entire market, and the dollar began to lose its position against almost all currency pairs, and this is mainly due to the fact that American companies that work on the production of shale oil and gas may be bankrupt.
Now we understand the reason for such a sharp strengthening of the single currency, where the existing overheating recovery is simply necessary.
Today, in terms of the economic calendar, we have data on eurozone GDP for the fourth quarter, where another estimate confirms a slowdown from 1.2% to 1.1%, but it is worth considering that we predicted a slowdown to 0.9% at all. Thus, the best data locally slowed the rapid recovery of the dollar, after its significant decline.
Further development
Analyzing the current trading chart, we see a consistent recovery process, where the level of 1.1300 stands in the way of quotes, and the current development is carried out relative to the framework of the recent gap. If the given downward move in the recovery process does not undergo an external background, then the existing gap can play a strengthening role, just in the direction of the level of 1.1300.
In terms of emotional mood, we see that the coefficient of speculative positions is breaking new records, and the external background helps it in this.
Detailing the available period every minute, we see that the main round of the recovery process came to us during the Pacific and Asian trading sessions, where the quote passed more than 100 points. The subsequent oscillation was in terms of oscillation from the upper boundary of the gap.
In turn, speculators have probably already worked on a partial recovery, where they are currently fixing and placing the next orders. So, new deals are considered in terms of a local move towards the level of 1.1300.
It is likely to assume that the recovery process will still be able to roll back the quote in the direction of 1.1300-1.1285, where the point for entering local positions is located near the middle of the gap - 1.1330. We will consider a more significant descent after fixing the price below 1.1285.
Based on the above information, we will display trading recommendations:
- Buy positions are considered if there is a sharp change in trading interest and the price is fixed higher than 1.1410.
- We consider selling positions if the price is fixed at the value of 1.1330, with the prospect of a move to 1.1300-1.1285.
Indicator analysis
Analyzing different sectors of timeframes (TF), we see that due to the rapid upward movement in history, the indicators of technical instruments mainly signal purchases. It is worth considering that the minute intervals are conditionally between the neutral and descending signal, and the hour periods are between the ascending and neutral signal.
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 10 was based on the time of publication of the article)
The volatility of the current time is 126 points, which is already higher than the daily average by 103%. It is likely to assume that a slight acceleration is still possible, just in the direction of the level of 1.1300.
Key levels
Resistance zones: 1.1440; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.
Support zones: 1.1300; 1.1180; 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.
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