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From the point of view of complex analysis, we see the execution of the subsequent level of 1.2620, after which there was a slowdown and a reversal, and now let's talk about the details. The upward turn, set as early as April 7, turned out to be quite stable, the quote managed to go over 450 points, but something else is important. The flat of 1.2150 / 1.2500, which lasted more than 2 weeks, was still broken through in the upward direction, where not only consolidation above the level occurred, we also reached the subsequent coordinate 1.2620. It turns out that the quote managed to work out the downward inertia [09.03.20-20.03.20] by more than 68%, which means that the V-shaped model has deviations from the standards, but still its outlines are fixed on the market as execution.
It is worth noting that the extreme upward turn is already a new structure relative to the course of 20.03.20-27.03.20, which means that the regrouping of trading forces was at the time of flat formation.
Analyzing the past day in detail, we see that the rebound from the level of 1.2500 occurred during the Pacific and Asian sessions, but at the beginning of the European session, an interesting slowdown was recorded in the form of consolidation from the Doji candles. So, on the basis of this slowdown, the variables 1.2520/1.2575 were identified, which made it possible to enter the market at the most appropriate moment.
As discussed in the previous review, traders analyzed the existing slowdown of the "Doji" candle of 1.2520 / 1.2575, working on the breakdown of the established boundaries.
The recommendations from Tuesday regarding the work on the breakdown of stagnation coincided, having a profit on a trade deposit.
[Buying positions are considered higher than 1.2575, with the prospect of a move to 1.2620]
In terms of volatility, we see an acceleration relative to the past four days, but in terms of the average daily indicator, the slowdown persists. It is worth considering that over time, the daily average indicator will recover, this is inevitable, as the external background adapts and the ambiguous - panic - mood of market participants will come to naught. Let me remind you that the average daily rate before a panic mood varied around 90-110 points.
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; Monday - 148 points; Tuesday - 227 points; Wednesday - 108 points; Thursday - 126 points; Friday - 198 points; Monday - 116 points; Tuesday - 217 points; Wednesday - 131 points; Thursday - 122 points; Friday - 42 points; Monday - 87 points; Tuesday - 146 points. The daily average, relative to the dynamics of volatility, is 170 points [see the table of volatility at the end of the article].
Considering the trading chart in general terms [the daily period], we see just the same upward turn, which not only locally returned the quote to the area on March 12, but also reached a significant level of resistance of 1.2620.
The news background of the past day was empty once again in terms of the economic calendar, but this did not stop market participants.
Regarding the informational background, comments are increasingly being made regarding the possible economic consequences of the COVID-19 virus. So, the Minister of Finance of Britain Rishi Sunak shared his opinion, who believes that in the 2nd quarter of the country's GDP can drop to 30%, and the restrictive measures introduced to combat the spread of coronavirus should be mitigated next month.
"It is important that we do not do even more harm due to blocking. We are considering the possibility of maintaining restrictions for another three weeks, and then we can begin to mitigate them," said Rishi Sunak.
Let me remind you that the UK plans to extend quarantine measures until May 7, and based on a study by the British Center for Economic and Business Studies, the quarantine costs the UK economy about £ 2.4 billion every day.
Regarding the current external background, information was received from a number of banking analysts that a possible delay in the transition period for Brexit due to the difficult situation in the world is being discussed. Against this background, the pound is losing its position.
Today, in terms of the economic calendar, we have data on retail sales in the United States, which can go down from 4.3% to 2.0% in March, which will certainly put pressure on the US dollar. At the same time, US industrial production figures will continue to decline by 1.5%. So in terms of fundamental analysis, the pound may still pull back against the backdrop of poor data on the States.
Further development
Analyzing the current trading chart, we saw the very weakening of the pound, as described above, where the quote worked out the resistance level of 1.2620 and returned again to the level of 1.2500. In fact, this is a reflection of sharp speculative interest, and a number of facts confirm this: background, volumes, and fluctuation structure.
By analyzing the burst every minute, the local inertia that arose at the start of the Europeans will be visible.
It can be assumed that the morning surge in activity will temporarily slow down in the region of the level of 1.2500 (1.2485/1.2530), having a small amplitude. After that, you can try to enter local positions for the purchase, which will be called up against the background of statistical data for the United States, as well as closing orders from short positions.
Based on the above information, we derive trading recommendations:
- We consider buying positions higher than 1.2530, with the prospect of a movement to 1.2575 - 1.2620.
- We consider selling positions in terms of maintaining a given mood and consolidating the price lower than 1.2470, with the prospect of a movement to 1.2440 - 1.2400.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the daily indicator is still focused on an earlier movement, giving a buy signal, while hour and minute periods smoothly move to a local downward movement.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(April 15 was built taking into account the time of publication of the article)
The volatility of the current time is 133 points, which is another 21% lower than the daily average. It is worth considering that the activity for the morning period is above normal, where further acceleration is not excluded due to speculative interest, as well as the news background.
Key levels
Resistance Zones: 1.2620; 1.2725 *; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 1.2500; 1.2350 **; 1.2280 (1.2240); 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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