Over the past trading day, the pound / dollar currency pair showed a low volatility of 70 points, in comparison with the past days. As a result, we received accumulation within the control level. From the point of view of technical analysis, we see that the pound rally led us to the range of 1.2350, where there were attempts to pass the price, but as a result, we got an accumulation with an amplitude of a little more than 70 points. A remarkable moment, in the area of 1.2375 / 1.2380 levels, there is a distinct periodic level that keeps the quote from further growth, and just these levels serve as the upper boundary of the emerging accumulation.
As discussed in a previous review, even speculators took a break, and you can understand how much profit was withdrawn in the first week of autumn, that is already possible to go on a vacation. What were the thoughts on transactions? It is to wait for the most attractive moment, where short positions were considered in case of price fixing below 1.2300, and long positions were built according to the tactics of monitoring a news feed. Considering the trading chart in general terms (the daily period), we see that the phase of correction from historical minimums is still on the market. For the third time, I would like to direct your attention to the temporary section of the end of 2016 and the beginning of 2017. The repetition of the plot of these fluctuations is one of the theories of traders, and you need to be prepared for this. By the way, another of the theories develops on an oblong correction, but in this case, a movement towards 1.2500-1.2550 is inevitable.
The news background of the past day contained data on the UK labor market, and so they came out pretty good. The unemployment rate declined from 3.9% to 3.8%. In turn, the average level of wages including bonuses shows an increase from 3.8% to 4.0%, while applications for unemployment benefits are reduced from 19.8K to 28.2K. So how did the British pound react to all this? Yes, in general, nothing, just smooth horizontal movement.
The reason for such restrained interest lies in the information background. The English currency ignores literally everything except splashing out information on Brexit. The background of the past day was modest. The British parliament went on a compulsory vacation, leaving the Prime Minister with instructions to agree with Brussels before October 19, otherwise, the divorce agreement will be postponed for at least three months. Boris Johnson himself can not calm down after such high-profile defeats and continues to shout about a hard way out. Therefore, the Prime Minister said live on Sky News: “Many people want this case to be completed, both the British and the people in Brussels and our friends and partners in the EU. This has been going on for three months now. We are working very hard to reach a deal, I think we will reach a deal, but if it is absolutely necessary, we will leave the EU without a deal. ” In turn, the Labourites, who already won this battle, continue to escalate the situation. Deputy Labor Party leader Jeremy Corbyn, as well as Tom Watson, will call for a second referendum on the advisability of Britain’s membership in the European Union before the general election.
Today, in terms of the economic calendar, we only have data on producer prices in the United States, where they initially predicted growth, but the data has been revised and is now expected to remain at 1.7%. Thus, the relationship of macroeconomic data and the fluctuation of the pound / dollar are already negligible, and with such data, there are none at all. All hope for an informational background, which, perhaps, will not be.
Analyzing the current trading chart, we see a clear lateral movement along the range of 1.2350, where the amplitude of the fluctuations is indecently small, 70 points, which raises the idea of obvious uncertainty in the actions of traders, as well as for a possible jump, later on. In turn, traders are steadily outside the market, where, in principle, they could work within the framework of accumulation, but what’s the point if working on a breakdown will bring much more profit.
It is likely to assume that the fluctuation within 1.2310 / 1.2380 (+/- 15 points) will continue for some time. However, this platform will serve as a good waiting platform for future transactions, where the work on the principle of breakdown of borders is the most suitable method. At the same time, do not forget to monitor the newsletter regarding the divorce process in order to most correctly and, most importantly, make a trading decision in time.
Based on the above information, we derive trading recommendations:
– Buy positions are considered in case of a clear price fixing higher than 1.2380 (+ 5p.), with the prospect of a movement to 1.2450-1.2500
– Selling positions are considered in case of fixing the price lower than 1.2300 (-5p.), with the prospect of a movement to 1.2250-1.2150.
Analyzing a different sector of timeframes (TF), we see that indicators in the short term signal sales, but the indicator is variable due to accumulation. Meanwhile, the intraday and medium-term outlook has taken the upside, but this is more a reflection of the previously formed impulse course.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 11 was built taking into account the time of publication of the article)
The current time volatility is 29 points, which is an extremely low value for this time section. It is likely to assume that in the event of ambiguity and a certain digestion of the entire past information background, volatility will remain in the framework of the daily average. There is one more plot, the accumulation, coupled with some information criticism regarding Brexit, can lead to a local upsurge, and we, in principle, are preparing for it.
Resistance zones: 1.2350 **; 1.2430; 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) **.
Support areas: 1.2150 **; 1,2000 ***; 1.1700; 1.1475 **.
* Periodic level
** Range Level
*** The article is built on the principle of conducting a transaction, with daily adjustment