21.10.201912:53 Forex-elemzések és áttekintések: Trading recommendations for the GBPUSD currency pair – placement of trade orders (October 21)

By the end of the last trading week, the pound/dollar currency pair once again showed high volatility of 144 points, resulting in bringing the quotation closer to the control level. From technical analysis, we see a steady upward interest, where the quote once again approached the psychological level of 1.3000, where the trading week closed. In addition to the vertical growth of 783 points – it is a strong emotional mood of market participants, which pushes the quote up. Emotions in the composition with information background created what we have now in the form of a bullish rally. It is also worth considering that as part of the entire array of the move (03.09.19 – 18.10.19), pa long downward move played with touching historical lows (1.19570, wherein the primary correction an injection informational background turned into an emotional and, as a fact, in what we have now.

Analyzing the hourly Friday day, we see a two-stage upward move: First 09:00-11:00; the second is 19:00-23:00 (time on the trading terminal), which is divided by a short consolidation of versatile "Doji" candles.

As discussed in a previous review, speculators have earned enough profit to afford for a while, but are out of the market. Of course, not all market participants adhere to this position and local inputs relative to the established boundaries of 1.2830/1.2940 were still made.

Looking at the trading chart in general terms (daily period), we see a frightening vertical move, without any rollbacks or corrections. Naturally, he did not remain without attention, and everyone unanimously started talking about a trend change as soon as the quotation went through the second correction in order. Is this the case? – in terms of technical analysis, there are signals of changing trends, if you focus on the period of the history of 2.5-3 years. If the emphasis is put on deeper time intervals of 10-11 years, then it is not so critical here, the current price change and the trend change is too early to speak. In this discussion, there is another theory, but we have already talked about it above, the emotional composition of market participants.

Friday's news background did not include statistics on the UK and the United States, which cannot be said about the information background.

So, the main background fell on Saturday and Sunday, where for the first time in 40 years, the British Parliament decided to work on a day off. The agenda, of course, was the Brexit process, where deputies rejected the agreement for the fourth time but approved an amendment that obliges Prime Minister Boris Johnson to request another delay from the EU.

Is it not revenge on the part of the deputies whom Johnson had previously sent on vacation, but the fact of the delay was a fact, Brexit continues to be in the zone of uncertainty.

Forced request.

This is how you can characterize the request for a delay, which was sent by Boris Johnson to the European Union, or rather there were three letters.

So, the first message was about postponing Brexit from October 31, 2019, to January 31, 2020, without the signature of Boris Johnson.

The second letter, already signed by Johnson, is in terms of justification that the postponement is a mistake and the government will not abandon attempts to conduct a transaction agreed upon with the EU through parliament and the prime minister is confident that everything will be done by October 31.

In a third letter, a note was sent to Brussels signed by Sir Tim Barrow, the representative of Britain in the European Union. It explains that the first letter was sent solely to enforce the law. Johnson himself, before sending him, phoned European leaders and warned that it was not from him, but from the parliament.

We have such a show with clowns, on the European side in the person of the head of the European Council Donald Tusk, it is confirmed that letters have been received with a request for a postponement, and now consultation with EU leaders is required. Later news came that the European Union did not mind postponing the exit if Johnson did not manage to close the deal by the end of the month.

Today, in terms of the economic calendar, we do not have statistics on Britain and the United States, thus the information background will continue its march. So, the UK government on Monday will re-submit the Brexit agreement to the Parliament, the deputies have prepared several amendments to it, including such radical as a possible repeat of the referendum.

Further development

Analyzing the current trading chart, we see the characteristic hopes of market participants for a possible agreement in the British Parliament and at the same time for a fairly positive reaction of the European Union regarding the delay. The next emotions that the market reflects on a spontaneous background are nothing more.

By detailing the fluctuations, we see that during the period of the Pacific and Asian trading sessions, there was a sluggish pullback within 70 points, but already with the release of Europeans to the market, regular leaps occurred. (09:00 current hour, time at the trading terminal)

In turn, speculators actively monitoring the news flow and the price-fixing point above the psychological level of 1.3000. Relative to the night and morning time interval, the points of local stagnation were in the area of 1.2874/1.2920.

It is possible to assume that the characteristic price spikes will continue to please speculators, where positions are built due to the direction of incoming information regarding Brexit. That is, any positive rumors, facts, comments on Brexit will continue to push the pound up, as you know, with a mirror background and vice versa. In terms of technical analysis, we already have a breakdown of the local peak on October 17 (1.2988), where the characteristic overbought is not even discussed when emotions rule the ball. Thus, a breakdown of the psychological level is just a point in time.

Based on the above information, we concretize trading recommendations:

• Buy positions are considered in the case of price-fixing higher than 1.3020, on the inertial course.

• We consider selling positions in the case of a sharp change in the information background, negative comments on Brexit, where there can be a significant correction against the background of overbought.

Indicator analysis

Analyzing different sector timeframes (TF), we see that due to the next surge of long positions, the indicators took a single upward position, which reflects the overall background of the market. It is worth considering that due to strong emotions, paired with the background of information, indicators can change arbitrarily, misleading.

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

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

(October 21 was built taking into account the time of publication of the article)

The volatility of the current time is 136 points, which already exceeds the daily average by 19%. It is probable to assume that in case of preservation of a forcing information background volatility still can grow.

Key levels

Resistance zones: 1.3000; 1.3170**; 1.3300**.

Support zones: 1.2770**; 1.2700*; 1.2620; 1.2580*; 1.2500**; 1.2350**; 1.2205(+/- 10p.)*; 1.2150**; 1.2000***; 1.1700; 1.1475**.

* Periodic level

** Range level

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