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For the last trading day, the euro / dollar currency pair showed extremely low volatility of 28 points, as a result of having an accumulation phase on the eve of an important event. From the point of view of technical analysis, we see that the quotation designated for itself a fulcrum in the form of a range level of 1,1100, with respect to which a rebound took place with subsequent accumulation. If we look at the volatility table, we will see that in recent days, it has been striving to reduce, which signals a clear waiting position on the eve of the jump. The background itself signals us of greater oversold than overbought, which also gives us an additional signal for reflection as discussed in a previous review. For the third trading day in a row, traders take a wait-and-see position outside the market, analyzing the existing fluctuations and accumulation. This again confirms the above theory. Considering the trading chart in general terms (daily timeframe), we see that the recovery of the global downward trend has blocked the level of 1.1100, and in the case of the formation of an elongated correction, the downward move will be postponed to more distant dates.
The information background of the previous day was not broad. The only thing that can be identified is personal income and expenses in the United States, where, as expected, there was an increase of 0.4% and 0.3% inclusive. In turn, the information background is in anticipation of a key event, a meeting of the Federal Commission on Open Market Operations, where the refinancing rate is expected to drop from 2.50% to 2.25%. The news is undoubtedly important, and they seem ready for it, but there are also some doubts. The American currency for a long time had a rapid strengthening, as if it did not believe in the action of the regulator, while the current stagnation signals uncertainty and a waiting phase. Let me remind you that the key rate was last lowered 11 years ago, and such an event, even in terms of predictable expectations, could hit the dollar. What is most interesting in this case is that Jerome Powell will tell at the press conference whether there will be hints about another reduction in the refinancing rate this year. But, all the above in terms of the information background will be destroyed if the rate is left at the current level, and such a development of the plot is possible in theory. In this case, the local driver for the dollar will be strong, and the mark of 1,1100 will fly very quickly, and there will be panic too.
In these colorful options there is another indirect plot, let's call it simply - ejection. Our favorite media sources, in particular, Bloomberg insiders can throw out anything in advance, thus, upward / downward puncture jumps will be provided.
We conclude our rubric with Brexit, but here everything is the same. Two negotiators met - Stephen Barkley, the representative of Britain, and Michel Bragnier, the representative of the EU - exchanged all the known words and fled. More specifically, Stephen Barkley indicated the well-known position of England that they want to reach an agreement, but leave the EU on October 31 with or without a deal. This event did not play in the market, as the rhetoric of Britain is already known to everyone, and on the nose is another important event.
18:00 UTC+00 - The decision on the interest rate of the Fed
18:30 UTC+00 - FOMC Press Conference
Further development
Analyzing the current trading schedule, we see a clear accumulation in the range of 1.1150 / 1.1160, which is a waiting stop. Expansion of the amplitude of fluctuations is possible in the range of 1.1130 / 1.1160, then we focus on the information background and outliers in the media, which can increase volatility. Traders, in turn, continue to occupy a position outside the market, but are already at a low start. If we still consider the scenario in the form of a reduction in the refinancing rate, then the current accumulation platform will serve to push the price in the direction of 1.1180 - 1.1230. This position is held by the majority of traders.
Indicator Analysis
Analyzing a different sector of timeframes (TF), we see that indicators change in the short term due to the accumulation phase, signaling a decrease in the current period of time. Intraday perspective took the upward position due to a general rebound from the level of 1,1100. The medium-term perspective maintains the downward interest due to the general background.
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 20 points. It is likely to assume that due to a significant information background, volatility may increase, exceeding the daily average. I remind you that the past days were focused on low volatility, which indicates some kind of readiness.
Key levels
Zones of resistance: 1.1180 *; 1,1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100.
Support areas: 1,1100 **; 1.1000 ***; 1.0850 **.
* Periodic level
** Range Level
*** Psychological level
**** The article is based on the principle of conducting a transaction, with daily adjustment
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