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From the point of view of complex analysis, you can see a rebound from the average level, which means that everything is going according to a previously set plan. Now, let's talk about the details.
The past trading day led to a rational pullback in the market, after a rapid downward movement in the course of which the quote managed to reach the average level of the earlier range of 1.2150 // 1.2350 // 1.2620. Regarding the pullback, it not only reached the predicted coordinate of 1.2450, but also returned the quote to the area of the variable level of 1.2500, where there was a stop on a systematic basis and, as a fact, a rebound. A similar situation has already occurred in the past. The level of 1.2350 was worked out by the quote, where during the regrouping of trading forces, the quote locally returned to the variable coordinate of 1.2500. Then, with new volumes, sellers returned to the market, who sent the quote towards the levels of 1.2150-1.2000.
Will there be a repetition of the plot of the past? All depends on the behavior of market participants around the level of 1.2500, so if it is worked out, no one will remember the coordinate 1.2350.
Analyzing the past trading day in detail, you can see that the round of long positions took place at the opening, and the touch of the 1.2500 level declined on a new day.
In terms of volatility, another acceleration of 10% is recorded relative to the average daily indicator, which suggests that speculative excitement is still on the wave.
As discussed in the previous review, traders viewed the rebound from the average level of 1.2350 as the prospect of a local move, which ultimately brought us profit.
The trading recommendation from Monday regarding long positions coincided, having an increase in the trading deposit.
Considering the trading chart in general terms (the daily period), it is worth noting that this fluctuation repeats the dynamics of recent periods, which means that the prospect of a further decline is still available on the market.
The news background of the past day contained data on sales in the secondary housing market of the United States for May, where instead of a decline of -3.0%, we saw a decline of as much as -9.7%, which upset investors and, as a fact, the US dollar continued to lose market position.
In terms of the general informational background, we have comments from the head of the Bank of England; Andrew Bailey, spoke out on reducing the quantitative easing program.
"When it comes time to reduce monetary stimulus, in my opinion, it's better to think about adjusting the level of reserves in the first place, without waiting for interest rates to rise on a sustainable basis," Andrew Bailey wrote in an article for Bloomberg.
In turn, the former head of the Bank of England, Mark Carney, said during an interview with the BBC that as the economy emerges from the coronavirus crisis, it will be necessary to increase public and private investments to counter potential consumer weakness and achieve long-term environmental goals.
"Consumer sentiment is unlikely to be positive, and borrowing, in addition to the necessary borrowing, is unlikely to be as high. There will be a need for public and private investment," said Mark Carney.
Today, in terms of the economic calendar, we have preliminary data on the index of business activity in Britain, the United States and Europe and everywhere they expect positive results, which as a result may not give a proper response in the market, unless of course expectations are confirmed.
At the same time, British Prime Minister Boris Johnson will announce a softening of quarantine today, where it is expected that Johnson will announce to the parliament which enterprises and which sectors of the economy will have to resume their work from July 4. The requirements for social distance will also be reviewed, in particular, the safe recommended distance between people can be reduced from two meters to one.
Further development
Analyzing the current trading chart, you can see the concentration of prices in the variable range of 1.2450/1.2500, where market participants are still on the wave of local long positions from the average level of 1.2350. The chance of resuming a downward move is still high, but for this, the quote needs to consolidate under 1.2440, where a breakdown of the level of 1.2350 will not take long.
By analyzing the time interval per minute, it is worth highlighting the time interval from 1:00 to 1:30 UTC+00, where speculative activity associated with the US dollar is visually visible relative to all trading instruments.
It can be assumed that price fluctuations in the 1.2450/1.2500 area will not last long, as a result of which the tactic of local operations is chosen to work on the breakdown of established boundaries. At the same time, downward development in the direction of levels 1.2150-1.2000 is still the main position.
Based on the above information, we derive trading recommendations:
- Consider buy deals above the level of 1.2510, towards 1.2550-1.2565.
- Consider sell deals if the price consolidates below 1.2440, with the prospect of a move to 1.2350-1.2150.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical tools on the minute and hour periods signal a purchase, due to an upward spiral from the average level of 1.2350. The daily period still signals a sell signal due to sequential recovery.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(June 23 was built taking into account the time of publication of the article)
The volatility of the current time is 70 points, which is considered not a small value for the start of the European session. It can be assumed that market dynamics will continue to accelerate due to speculative sentiment, as well as the external background.
Key levels
Resistance Zones: 1.2500; 1.2620; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Zones: 1.2350 **; 1.2250; 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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