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From the point of view of the complex analysis, the number of speculative positions has increased once again. As a result, the quotes returned to its previous levels. Now, let's get to the details.
The past trading day was a blow to short positions. They suddenly lost their relevance and were replaced by a speculative sentiment, which managed to win back most of the fall. It turns out that an attempt to change market ranges is still one of the traders' goals. In this case, the fluctuation between the levels of 1.2620/1.2770 should become a kind of platform for the subsequent transition to a new range of fluctuations of 1.2770//1.3000//1.3300, unless, of course, a new rush of speculative positions in other direction takes place.
Analyzing the past trading day in detail, we can see that trading forces have been concentrated within the level of 1.250. This is where market participants locally managed to go down to the area of 1.2455. However, with the same speed there was a reverse move, which returned the quotes to the level of 1.2620.
As for the development theory, everything will depend on a number of factors: a breakout at the level of 1.2770 as well as the external background. If you start from the current data, it indicates changes in the range 1.2150//1.2350//1.2620 ----> 1.2770//1.3000//1.3300. However, it is important to be extremely careful about the external background and emotional state of speculators, since everything can change quickly.
The comparative analysis of the EUR/USD and GBP/USD currency pairs indicates that both instruments have a chance of dramatic changes in the market movement. At the same time, it is better to refrain from making impulsive decisions, since an early entry can limit you in actions if the market background changes.
Traders were aware that trading forces had concentrated within the level of 1.2500. Thus, they decided to break out this same concentration.
Monday's trading recommendation for buy positions coincided and was profitable.
[It is better to consider opening buy positions, if the price consolidates higher than 1.2550, towards 1.2620.]
In terms of volatility, a 12% acceleration of activity is recorded in regards to the average daily dynamics. It is worth noting that high volatility has maintained in the market since the beginning of June, which also raises speculators' attention.
Analyzing the trading chart in the daily time frame, we can see that market participants with all the number of controversial moments in the UK economy continue to concentrate on the ranges of 2018 and 2019.
As for yesterday's news background, no important data in the United Kingdom and the United States were released, which cannot be said in terms of the information background.
Thus, yesterday, Prime Minister Boris Johnson personally intervened in the process of negotiations with the EU for the first time since Britain left the Euro bloc.
An online meeting with Ursula von der Leyen, Charles Michel and David Sassoli, Presidents of the European Commission, European Council, and European Parliament became a kind of success from the point of view of Boris Johnson and the media.
Nobody knows what exactly happened. The only thing everyone is sure about is that the UK is ready to make concessions and July can become the final point in a prolonged process.
Are we supposed to trust everything that is written in the media? I don't think so. We do remember the long-playing Brexit process and a lot of loud statements that have gone nowhere. Why should it be different this time? This is a good question, isn't it.
In any case, the media buzz attracts speculators' attention, which means high activity.
As for the macroeconomic calendar, we have the UK labor market data. The unemployment rate remained unchanged for April. However, the number of applications for unemployment benefits increased to 525,900 in May. The figures for April were revised to 1,032,700 from 856,500.
As a result, the British pound fell against this background.
The United States will publish the report on retail sales later during the day which are expected to decline to -24.6% from -21.6%. This can become a new anti-record. At the same time, Jerome Powell, the head of the Federal Reserve System, will deliver a report on the economic prospects and recent decisions of the Fed in the field of monetary policy to the Joint Economic Committee of the US Congress.
Further development:
Analyzing the current trading chart, we can see a pullback towards the level of 1.2620, where market participants slowed down and thereby formed a variable amplitude within 1.2620/1.2670. It is worth noting that speculative sentiment is still preserved in the market, and the available amplitude is temporary.
It can be assumed that the price fluctuation within the 1.2620/1.2670 range will end today. However, if the price consolidates above 1.2690, the price movement set a day earlier will resume. Alternative positions will be considered if the price stays in the given range and then consolidates below 1.2600.
The following trading recommendations are based on the above information:
- Consider buy deals if the price consolidates above 1.2690 with the target at 1.2770.
- Consider sell trades if the price consolidates below 1.2600 with the target at 1.2500.
Indicator analysis
Analyzing different sectors of the timeframes, we can see that the performance of technical instruments relative to hourly and daily periods signal an upward interest in the market amid the consolidation of the price above the level of 1.2620.Volatility per week/Measurement of volatility: Month; Quarter; Year
The Measurement of volatility reflects the average daily fluctuation, calculated for the Month/Quarter/Year.
(On June 16, it was built taking into account the time of publication of the article)
Currently, the volatility is 95 pips, which is a lot for this period of time. It can be assumed that speculative sentiment will continue to drive hype into the market. Thereby, the volatility will continue to grow.
Key levels
Resistance zones: 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 1.2620; 1.2500; 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 adjustments
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