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Last trading day had an upward mood in the market, during which the quotes increased from the level of 1.1180 to the forecasted area of 1.1240 / 1250, where the movement slowed locally. The correction is the second recorded prior to a recovery, at which the most important move is to avoid excessive trading volumes in long positions, otherwise the continuation of the bearish move will not occur.
During the bullish movement, market participants reached the area of interaction of the trading forces 1.1440 / 1.1500, from which on a regular basis, a slowdown and rebound occurs. It arose discussions of a recovery process, but if the quotes turn back to the area of 1.1380 / 1.1400, such a scenario may not occur. This suggests that in the wake of speculative excitement, the chance of a breakout from the area of interaction of trade forces is high.
Such is one of the theories circulating in the market, but being prepared on any scenario is recommended. Strategies on local operations are currently the most relevant.
Thus, analyzing the past trading day in detail, we can see that the upward spiral took place from the very opening of the trading week to 15:45 (UTC + 1), the movement at which allowed the quotes to reach forecasted levels. A stop took place in a narrow range 1.1250 / 1.1260, which remained until the end of the day.
As discussed in the previous review, traders worked on a rebound from the level of 1.1180, which resulted to an impressive profit.
The trading recommendation on Monday was followed, and the quotes reached the area 1.1240 / 1.1250, which increased the trade deposit.
With regards to volatility, a 100-point activity was recorded for the first time in three trading days, which signals speculative activity in the market. High dynamics was already set from the beginning of the month, in which the average value was 98 points [calculation of volatility from June 1 to June 23].
Analyzing the trading chart, we can see a small similarity between the dynamics and the fluctuations within the period March 2015 - January 2017, which can help build future theories and trading ideas in the market.
As for news, the reports published yesterday contained data on sales in the US secondary housing market, where instead of a -3.0% decline, a decrease of as much as -9.7% was recorded, which put pressure on the US dollar.
A survey on the economic recovery after the coronavirus was also conducted by Reuters, the results of which revealed that experts support the actions of the Fed, believing that the recovery has already begun, as noted by the resumption of economic activity in the country. Nevertheless, the losses observed in the first half of 2020 will not be restored until the end of next year.
The forecasts for economic recovery in the US are also similar to other countries. Thus, moods and sentiments will continue to affect the activity of investors and speculators in the market.
Data on business activity in Europe was also released today, where, in the services sector, a growth from 30.5 points to 47.3 points was recorded. Production also rose from 39.4 points to 46.9 points, which resulted in the composite business activity growing from 31.9 points to 47.5 points. Such results are significantly better than expected.
In the afternoon, a similar index for the US is expected, in which in the services sector, an increase from 37.5 points to 44.0 points is anticipated. In the manufacturing sector, an increase from 39.8 points to 47.0 points is expected in the index.
Further development
Analyzing the current trading chart, we can see that the quotes reached the level of 1.1300, but locally slowed down and formed a pullback from the Doji candles. Holding long positions exacerbates the situation with the recovery process, which may end if prices consolidate higher than 1.1350 in the H4 chart.
At 02:00 - 02:30 (UTC + 1), speculative activity was recorded, which manifested itself without exception on all trading instruments. Such activities were associated with the manipulation of speculators with positions in the dollar.
Thus, temporary fluctuations along 1.1300 may lead to an accumulation within the limits of 1.1280 / 1.1310, in which the best tactic for local operations is to work on a breakout from the given ranges.
Based on the information listed above, we present these trading recommendations:
- Open buy positions above 1.1310, towards 1.1350-1.1380
- Open sell positions if the quotes consolidate below 1.1280, in the direction of 1.1235-1.1200.
Indicator analysis
Analyzing the different sectors of time frames (TF), we can see that the indicators of technical instruments in the minute and hourly periods signal buy due to the rapid upward spiral from the level of 1.1180. Meanwhile, the daily period, due to a consolidation within the 1.1300 level, changed the signal from buy to neutral.
Volatility per week / Measurement of volatility: Month; Quarter Year
The measurement of volatility reflects the average daily fluctuation calculated by Month / Quarter / Year.
(June 23 was built, taking into account the time of publication of the article)
Volatility at the current time is 73 points, which is very close to the average daily value. If speculative excitement persists in the market, volatility may increase a little more.
Key levels
Resistance Zones: 1.1300; 1.1440 / 1.1500; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support Areas: 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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