Rimani 
Condizioni di trading
Strumenti
The euro/dollar currency pair showed high volatility of 70 points over the last trading day, as a result of which the initial pullback moved into the correction phase. From technical analysis, we see that the descent of the quote to the area of values in 2017 led to the fact that short positions went into a phase of fatal overheating, and an earlier six-day inertial course contributed to this. Correction is what we see now, fixing the price above the psychological level of 1.1000 indicates this.
As discussed in the previous review, traders have fixed their previously opened short positions and are now in a fairly comfortable area, waiting for the end of the corrective move. Speculators, in turn, continue to work, as the correction is a good platform for earnings and fixing the price above the psychological mark of 1.1000, made it possible to once again enter long positions, taking a small, but still a piece of the profit. Looking at the trading chart in general terms (daily period), we see that the last candle drew us across to the top, but it did not change the general picture of the trend, since the downtrend was still a downtrend, so it remains. Advice – to open the daily chart and move it away, analyze the 2015-2017 section, it can help us in understanding the further decline.
The news background of the past day contained data on European retail sales, where everything is not as good as we wanted, but there is still a drop of positive. So, the volume of retail sales (y/y) slowed from 2.8% to 2.2%, but previous data was revised in favor of the growth of 2.6% – 2.8% and the actual data came out slightly better than expected 2.0% – 2.2%. Almost simultaneously, the data on business activity in the service sector were released, where we have an increase from 53.4 to 53.5, the composite index also shows an increase to 51.9. Thus, in general, the EU data came out not as bad as expected, and there was an incentive for the euro to grow.
The information background again tickled the abscesses of speculators, let's analyze it. We will start with the Federal Reserve System, and there was a fuss about a possible reduction in the base interest rate at the autumn meeting, James Bullard added fuel to the fire. The other day, the head of the St. Louis Federal Reserve expressed his opinion on the rate, calling what is happening so: "We are too high." Bullard meant that the existing target interest rate in the range of 2%-2.25% was higher than the current yield of all US Treasury securities. Normally, the Fed rate should form a baseline for determining other rates, but even 30-year bond yields have fallen below 2%. Market participants perceived these words as a desire to reduce the base rate by 0.5%. Let me remind you that in the summer, James Bullard expressed a different point of view regarding the rate. In turn, the head of the Boston Federal Reserve continues to adhere to the previously set judgment and believes that at this time he does not see the need to reduce the base rate.
"As long as we see that consumption and employment are relatively strong, I'm not so worried," Eric Rosengren said
Now back to our rams, a typo meant the Brexit. Yesterday, the House of Commons of the British Parliament, contrary to the position of the government, supported the idea of postponing the Brexit term if there is no agreement by October 31. That is, hard Brexit is canceled, we diverge, gentlemen. Prime Minister Boris Johnson will be obliged to sit down at the negotiating table and ask for another delay from the European Union. Against this background, the British pound pulled up but followed by the euro.
In general terms, the information and news background now makes clear the reason for the recovery of the market.
Today, in terms of the economic calendar, all attention is focused on ADP data on US employment, which reflect preliminary figures ahead of the publication of the report of the United States Department of Labor on Friday. So, according to forecasts, they expect a decrease in growth rates from 156K to 149K, which may put local pressure on the US dollar if the data are confirmed.
US 13:15 London time – ADP report on the level of employment in the private sector.
Further development
Analyzing the current trading chart, we see that the correction already weights more than 100 points, fixed above the psychological level of 1.1000. The current accumulation in the form of stagnation, positioned within the mark of 1.1020/1.1040 carries a temporary character, until the publication of ADP. In turn, speculative traders continue to work in the correction phase, considering the local growth in the range of 1.1070-1.1080.
It is likely to assume that the amplitude of the current oscillation can be extended to the limits of 1.1000/1.1050, where it is necessary to analyze the existing boundaries for breakdown and further progress. If the ADP data coincide with the expectation, the quote can grow locally, but then return to the beginning of the current day, that is, to 1.1020, possibly top 1.1000.
Based on the above information, we derive trading recommendations:
Technical analysis
Analyzing the different sectors of timeframes (TF), we see that the indicators in the short term are variable jump due to the existing stagnation. Intraday indicators focused on the correctional move. Medium-term indicators follow the main market movement.
Volatility per week / Measurement of volatility: Month; Quarter; Year
The measurement of volatility reflects the average daily fluctuation, with the calculation for the Month / Quarter / Year.
(September 5 was built taking into account the time of publication of the article)
The current time volatility is 27 points. It is likely to assume that due to the news background, volatility may still increase, exceeding the daily average.
Key levels
Resistance zones: 1.1100 **; 1.1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support zones: 1.1000***; 1.0850**; 1.0500***; 1.0350**; 1.0000***.
* Periodic level
** Range Level
*** Psychological level
**** The article is based on the principle of conducting transactions, with daily adjustments.
Le recensioni analitiche di InstaForex ti renderanno pienamente consapevole delle tendenze del mercato! Essendo un cliente InstaForex, ti viene fornito un gran numero di servizi gratuiti per il trading efficiente.
