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From the point of view of a comprehensive analysis, you can see the reverse process with price consolidation at the level of stabilization last week, and now let's talk about the details.
Last trading day was expressed in an intensive upward trend after a slight 17-hour stagnation of 1.1230/1.1265, where market participants still reminded everyone of the desire to change the medium-term trend. So, the correction move still acquired a scale of 30% relative to the entire inertia move, where with the current overheating of long positions, the correction could be greater, but this is enough for a formal regrouping of trading forces. The second factor of stabilization of trading interest is at the formation stage, the amplitude fluctuation within the range of 1.1240/1.1400 (1.1440). All this is necessary only for one goal – to break through the area of interaction of trading forces 1.1440/1.1500, which deters buyers from a drastic change in the medium-term trend from 2018.
It is worth reminding traders that such a strong upward movement with an attempt to change the market already occurred at the beginning of this year, but it all ended in failure for buyers. Thus, having impressive signals about the upward trend, do not forget about history, and it is better to be prepared for everything, which is why I repeatedly speak about local positions, and not about the main ones.
In terms of volatility, an acceleration of 19% relative to the average daily indicator is recorded, but the existing dynamics have been maintained on the market for more than one day, which indicates a high speculative operations rate. It is worth noting that the average daily figure has grown by 3 points since the beginning of June.
As discussed in the previous review, traders were ready for the further upward movement, which is why pending orders were placed above the level of 1.1300.
Considering the trading chart in general terms, the daily period, it is worth noting that the current maximum of 1.1422 is about 40% recovery relative to the scale of the medium-term trend from 2018.
The news background of the past day was absent in terms of the economic calendar, which cannot be said about the information background. So, the United Kingdom and the European Union have moved one step closer to reaching an agreement on trade relations after Brexit, after an hour-long video call between Boris Johnson and the leadership of the EU bloc. Thus, there is no specifics, but the British Prime Minister is inspired to declare that there is progress in the negotiations, and the EU partners are confident that Johnson is ready to compromise, which will soften the position of London.
Boris Johnson set his sights on concluding the deal in the month of July, which stirred up speculators, pushing off the exchange rate of the single currency, but everyone probably forgot that such loud statements are not the first in the entire Brexit process.
Today, in terms of the economic calendar, we have retail sales in the United States. The decline of which can accelerate from -21.6% to -24.6%, which will become a new record breaker. At the same time, Jerome Powell, the head of the Federal Reserve System [FRS], will speak to the Joint Economic Committee of the US Congress on the economic prospects and recent decisions of the Fed in the field of monetary policy.
Further development
Analyzing the current trading chart, you can see a slight slowdown within the range of 1.1320 / 1.1355, where the quote is trying to stabilize after a recent surge in activity. In fact, market participants returned again to the area of fluctuations of the past week, which means that the upward trend is still relevant, but far from dramatic changes.
We can assume a temporary fluctuation within 1.1320 / 1.1355, where you can take advantage of local activity, working on the breakdown of established boundaries
Based on the above information, we derive trading recommendations:
- Sales positions are considered below 1.1320, towards 1.1300.
- Purchase positions are considered above 1.1360, towards 1.1400.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical instruments on hourly and daily periods are focused on the upward trend, signaling a purchase.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the average daily fluctuation calculated for the Month / Quarter / Year.
(June 16 was built taking into account the time of publication of the article)
The current time volatility is 37 points, which is considered a low indicator for this time section. It can be assumed that activity will still grow in the general flow of speculative positions.
Key levels
Resistance zones: 1.1440 / 1.1500; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support zones: 1.1300; 1.1180; 1.1080 **; 1.1000 ***; 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.
* Periodic level
** Range Level
*** Psychological level
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