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From the point of view of complex analysis, we see a significant upward move, which managed to restore the quote by more than half relative to the early inertial movement, and now let's talk about the details. The quote has passed more than 1000 points over the past week, and this speed cannot but please speculators. In fact, we got a recovery of 61%, and the quote returned to the earlier medium-term move. Everything that happens on the market is striking in its scale, previously it took a month / two to get a thousand points, and now it is a week, and literally straight vertical price lines. If we have such a speed of price movement, then our possible profit comes much faster than, for example, a year earlier, the current situation needs to be used.
Regarding trading tactics, I mentioned in past reviews that the market is now very subject to the external background, and thus it makes no sense to follow global trends if you can work on local fluctuations and make money, like catching a trend.
By detailing the Friday trading day, we see that the quote is working at the level of 1.2150 during the European session, where it was previously noted that this coordinate reflects a kind of support. The cycle was set during which the conditional peak in the form of the value 1.2300 breaks through the quote, where we get a new gain, based on which we pass the level of 1.2350. The subsequent movement was already in the course of inertia, where the quote almost came close to a subsequent level of 1.2500.
In terms of volatility, we see high dynamics, where the quote exceeded the average daily indicator again by almost 100%. If we add up all the daily fluctuations for the week, we get a staggering 1700 points, now you understand why I am writing about how it is more profitable to work on local oscillations at this time than on medium-term movements.
Details of volatility: Monday - 165 points; Tuesday - 245 points; Wednesday - 172 points; Thursday - 358 points; Friday - 359 points; Monday - 144 points; Tuesday - 271 points; Wednesday - 676 points; Thursday - 354 points; Friday - 522 points; Monday - 267 points; Tuesday - 296 points; Wednesday - 333 points; Thursday - 452 points; Friday - 352 points. The average daily indicator, relative to the dynamics of volatility - 178 points [see table of volatility at the end of the article].
As discussed in the previous review, traders considered the tactics of entering the market in case of breakdown of one or another border of 1.2150 / 1.2300.
The forecast from Friday regarding the work on the breakdown of the established coordinates coincided, with a substantial profit.
[We consider the buy positions in two stages, the first goes in case of fixing a price higher than 1.2310, with a move to 1.2350. The second stage is carried out after fixing the price higher than 1.2360, with a move to 1.2450-1.2500.]
Considering the trading chart in general terms [the daily period], we see vertical fluctuations, but if we still focus on the general movement, the global trend remains downward.
Friday's news background did not have any relevant statistics, so the market continued to adhere to external pressure.
In terms of informational background, we see a kind of anti-record in the United Kingdom, where Prime Minister Boris Johnson, heir to the throne, Prince Charles;, Minister of Health and Brexit negotiator David Frost, quarantined. In turn, Fitch Ratings downgraded Britain's credit rating from AA to AA due to a weakening state financial system. The agency's comments said that the downgrade was due to large uncertainties in the country's economy, as well as trade relations between Britain and Europe and the spreading coronavirus.
The difficult situation in the world associated with the COVID-19 virus is pulling the global economy into a new crisis, where there are no prospects in the British currency, but when we see significant pressure on the US dollar, this results in local growth.
Today, in economic terms, we had data on the February lending market for Britain, where the number of approved mortgage applications fell from 71.344K to 73.546K, but it is worth noting that they expected a reduction to 65.206K. At the same time, data on consumer lending came out, which recorded a sharp decline from 1.1 billion pounds to 900 million pounds.
In the second half of the day, we are waiting for indicators on pending home sales in the United States, where they expect a strong decline from 5.7% to 1.5%.
Further development
Analyzing the current trading chart, we see a rebound from the level of 1.2500 with the return of the price to the area of 1.2350. In fact, we got another range of a temporary nature of 1.2350 / 1.2500, within which a quote develops. The strategy is identical to the past, we work on local fluctuations relative to the one that has movement, we hold transactions within the day, if the prospect allows, then we transfer it to the next period.
From the point of view of the emotional mood of market participants, we see a high activity of speculators who are pulling volatility. Do not wait for the weakening of activity, since the external background will not allow this.
In turn, traders consider having frames 1.2350 / 1.2500 as reference points for local positions in case of breakdown.
Having a general picture of actions, it can be assumed that the slowdown is temporary in nature, where we will see a jump in activity again soon.
The trading tactics distinguish the robots breakdown method, where the upper frame is the level of 1.2500, and the lower border is the variable level of 1.2350.
Based on the above information, we derive trading recommendations:
- We consider buying positions in two stages, the first goes in case of fixing the price higher than 1.2425, with a move to 1.2480. The second stage is carried out after fixing the price higher than 1.2500, with a movement to 1.2620.
- We consider selling positions in case of price fixing lower than 1.2315 with the prospect of a movement to 1.2270-1.2200.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical tools occupied the upside relative to hour and minute intervals due to the upward movement and the development of more than 50% of the recent inertia.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for Month / Quarter / Year.
(March 30 was built taking into account the publication time of the article)
The current time volatility is 148 points, which is even less than the average daily indicator. It is likely to assume that we will see a new round of activity in the near future, where another breakdown of the average daily indicator will be established due to regularity.
Key levels
Resistance Zones: 1.2500; 1.2620; 1.2725 *; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support areas 1.2350 **; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411); 1.1300; 1,1000; 1,0800; 1,0500; 1,0000.
* Periodic level
** Range Level
*** Psychological level
**** The article is built on the principle of conducting a transaction, with daily adjustment
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