For the previous day, the euro / dollar currency pair showed the smallest volatility since Monday – 27 points, as a result of having the maximum convergence with the fulcrum and the subsequent slowdown. From the point of view of technical analysis, we see that after reaching the pivot point, which is already in the form of a range level of 1,1100 / 1,1120, there was a sharp slowdown with the formation of a clear cluster. Considering the trading chart in general terms, we see that the pulse of the impulse has not yet managed to overcome the reference point in the form of a range level, and so far this is reminiscent of a possible refinement, but theoretically we can face a temporary rearrangement of trading forces.
The news background had statistics on the United States, where they published the second estimate of GDP for the first quarter, and, as expected, there was a slowdown in economic growth to 3.1%. At the same time, data on applications for unemployment benefits was published in the United States, where they waited for a reduction of applications by 10 thousand, as a result they received just 22 thousand, which, after all, supported the dollar. In Europe, most countries celebrated the “Day of the Ascension of the Lord”, thereby trading volumes were reduced. On the information background, everything is unchanged, the UK & EU “divorce” process retains a log of ambiguity, thus investors are more restrained in their actions.
Today, in terms of the economic calendar, we do not have any statistics for Europe. Only at the second half of the day, there will be data on personal expenses and incomes in the United States, where they expect growth of 0.3% and 0.2%. From the background information, we have only a statement by US President Donald Trump, who threatened Mexico that if within 10 days it does not stop the flow of migrants moving north, the US will impose duties on all goods.
“On June 10, the United States will impose a 5 percent duty on all goods entering our country from Mexico, until such time as illegal immigrants entering our country through Mexico are stopped,” wrote Trump, adding that duties will increase each month and by October 1, it will reach 25 percent, if “the problem of illegal immigration is not resolved”.
Perhaps, just this news indirectly won back on a pair of euro / dollar, from the resulting cluster.
The upcoming trading week in terms of the economic calendar is extremely saturated with statistics and events, in comparison with the past week. If we select only events, then we have: the speech of the Fed Chairman, Mr. Powell; voting in the Parliament of the United Kingdom; ECB meeting followed by a press conference; Theresa May’s resignation and possible receiver. I think we should not even say that we are waiting for an extremely volatile week. The most interesting events are displayed below —>
Monday, June 3
United States 17:00 MSK – Manufacturing PMI from ISM (May): Prev. 52.8 —> Forecast 53.3
Tuesday, June 4
EU 12:00 MSK – Consumer Price Index (CPI) (y / y) (May): Prev. 1.7% —> Forecast 1.4%
United States 16:45 MSK – Speech by Fed Chairman Mr. Powell
Voting in the Parliament of Great Britain under the Brexit Agreement
Wednesday, June 5
EU 12:00 MSK – Producer Price Index (PPI) (y / y) (Apr): Prev. 2.9% —> Forecast 3.0%
EU 12:00 MSK – Retail Sales (YoY) (Apr): Prev. 1.9%
United States 15:15 MSK – Change in the number of people employed in the non-farm sector from ADP (May): Prev. 275K —> 190K forecast
United States 17:00 MSK – Non-manufacturing Business PMI (PMI) from ISM (May): Prev. 55.5 —> Forecast 56.0
Thursday, June 6
EU 14:45 MSK – ECB Monetary Policy Statement
EU 15:30 MSK – ECB Press Conference
Friday, June 7
United States 15:30 MSK – Change in the number of people employed in the non-agricultural sector (May): Prev. 263K
—> 190K forecast
United States 15: 30msk. – Unemployment rate (May): Prev. 3.6% —> Forecast 3.7%
Theresa May’s Resignation
These are preliminary and subject to change.
Analyzing the current trading chart, we see that the accumulation we saw earlier has broken up, but after a small impulse, a slight slowdown began. I do not exclude that many traders have already flown into these positions, which, in principle, is not bad, but you should be aware that if this impulse took place in the form of a background, then its movement may be short-term and short-lived. For this reason, drag your feet and be prepared to take profits. If we consider short positions, the judgment remains the same as last time, we wait for a clear price fixing lower than 1,1100 and then we make an entry.
Analyzing a different sector of timeframes (TF), we see that the indicators in the short term have changed from a downward interest to an upward interest, due to the current jump. Intraday and mid-term outlook and maintains a downward mood on the general background of the market.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(May 31 was based on the time of publication of the article)
The current time volatility is 31 points, if the prerequisites increase volatility due to the background. And if, of course, the quotation does not return back to the area of the cluster and it will remain there.
Zones of resistance: 1.1180; 1,1300 **; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support areas: 1.1112; 1.1080 *; 1.1000 ***; 1,0850 **
* Periodic level
** Range Level