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For the last trading day, the currency pair pound / dollar showed a high volatility of 107 points, as a result, having a further decline followed by a stagnation. From the point of view of technical analysis, we see the inertial move, which set the market on July 29. As a result, we received not just a decline, but some kind of local collapse of more than 370 points of impulse movement. The past day was a reflection of some residual reaction from the inertial course of Monday, where the main course took place during the non-trading session, and at the moment there was a literal stagnation in Europe and America. As discussed in the previous review, traders moved to complete fixation of previously opened short positions at the time of impulse candles and grazing level of 1.2150. After that, traders took a wait-and-see position in the hope of technical correction due to strong overheating of short positions. Considering the trading chart in general terms (daily timeframe), we see that the global downward trend is more alive than ever. The values of the levels of 2019-2018 have already been passed, while the lows of 2016 are just around the corner. The trend clock frequency is still in the "Impulse" phase, where it considers the transition to the "Correction" beat.
The information and news background of the past day had only personal income and expenses in the United States, where there is a coincidence of forecasts in the form of 0.4% and 0.3% inclusive. The information background continues to evolve around the UK & EU divorce process, this time the British Brexit Minister Stephen Bacrclay held talks with the primary negotiator of EU, Michel Barnier. Britain outlined its position on Brexit: we want to reach an agreement, but we will leave the European Union on October 31 with or without a deal. In principle, there is nothing surprising, Boris Johnson has long made it clear that he is ready for a tough exit. The goal is the same - to go out, and then we'll see. This is one of the reasons for the protracted fall of the British currency.
Today, the focus of the meeting is the Federal Commission on Open Market Operations, where they are preparing to lower the refinancing rate from 2.50% to 2.25%. The news is, in principle, expected. However, the latest rate change occurred 11 years ago, and there will be pressure on the American currency anyway. It is worth considering such a moment that talk about lowering the rate has been going on for a long time, but we will only know the decision after the fact, and if the rate remains unchanged, the response of the market in the form of unjustified expectations will result in a hysterical decline.
18:00 UTC+00 - The decision of the Fed on the interest rate
18:30 UTC+00- FOMC Press Conference
Further development
Analyzing the current trading chart, we see a characteristic stagnation within the level of 1.2150. As such, accumulation characterizes a clear uncertainty in the market, where they had previously had a huge number of sellers. And now, there was a fixation of profits, and the overflow of interest is still in the waiting stage. Traders continue to stay out of the market, analyzing the behavior of quotes. But now, the fixation points are already being monitored relative to the accumulation limits of 1.2125 / 1.2190, since a price jump is possible.
It is likely to assume that the current stagnation will result in a jump in the market, and if we refer to the colossal oversold and informational background, then the theory of correction is possible with a movement towards 1.2250-1.2290.
Based on the available information, it is possible to decompose a number of variations, let's specify them:
- Positions for purchase are considered in the case of price fixing higher than 1.2200, with the prospect of a move to 1.2250-1.2290.
- Positions for sale are considered in the event of a change in the background information and price fixing lower than 1.2110, with a movement towards the psychological level of 1.2000.
Indicator Analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short term changeably reflect an upward interest due to fluctuations within the accumulation. On the other hand, intraday and mid-term prospects both retain a downward interest due to the recent inertial move.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(July 31 was based on the time of publication of the article)
The current time volatility is 29 points. It is likely to assume that due to the strong information background, in particular, the Fed meeting. Thus, volatility may increase, exceeding the daily average.
Key levels
Zones of resistance: 1.2350 **; 1.2430; 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 *; 1.3000 **; 1.3180 *; 1,3300.
Support areas: 1.2150 **; 1.2000.
* Periodic level
** Range Level
*** The article is based on the principle of conducting a transaction, with daily adjustment
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