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Over the previous trading day, the pound / dollar currency pair showed a volatility equal to the average daily 81 points, as a result of having a decrease to the minimum of the current year. From the point of view of technical analysis, we see a steady downward movement, where the quote came close to the January low of the current year 1.2433 (03/01/2019), as a result of having a slowdown. Traders who hold their short positions for a long time try to take profits by shifting restrictive orders, since there is a risk of a rebound in the form of a psychological component. Considering the trading chart in general terms, we see that since the beginning of the month, the pound has sunk more than 250 points, seeking to restore the global downward trend. The likelihood that the fracture of this year's low will lead to the fact that we will go to the values from the start of 2017 and the end of 2016,
The news background is focused on the speech of Fed Chairman Jerome Powell, but, as expected, there was no pressure on the market, since the topic of discussion did not affect the refinancing rate, but the issue of stress tests of the banking system was discussed. From the news background, we had statistics on open vacancies in the United States, where we waited for growth from 7.449M to 7.470M, but as a result, the previous values were revised downward and the new figures were worse than expected: 7.372M ---> Act. 7.323M. The dollar responded to the news in the form of a slowdown. By tradition, we complete our informational background with news from behind the mirror of Britain. A key contender for the place of Prime Minister Boris Johnson - admitted the possibility of suspending the work of the House of Commons of the British Parliament until the implementation of the country's exit from the European Union.
Today, in terms of the economic calendar, we have statistics on industrial production in the UK, which, compared to the previous period, looks right very well, an increase of 1.1%. The key event of the day is the speech of Fed Chairman Jerome Powell in the US Congress, where traders are waiting for specifics about the fate of monetary policy, in particular, the refinancing rate. It should be understood that the meeting in Congress is held in two days (July 10-11), and it is likely that the first day will deal with the banking system and stress tests, in addition to the entire publication of the FOMC protocols after the speech, thus pressing questions regarding rates will be left for tomorrow.
Further development
Analyzing the current trading chart, we see that the quotation is loose within the minimum of the month of January, showing low volatility. It is likely to assume that in case of finding a pivot point, coupled with overheating of short positions, we can expect a correction, but the entrance to which traders consider with a delayed pending order to insure against the current inertial move.
Based on the available information, it is possible to decompose a number of variations, let's consider them:
- Buy positions will be considered in case of price fixing higher than 1.2480.
- Positions for sale tend to fix the previously received profit from maintaining short positions. Further trade deals will be considered in the case of price fixing lower than 1.1420, with the support of the inertial move and informational news background, if such occurs.
Indicator Analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short, intraday and medium term, retain a downward interest against the general background of the inertial course.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(July 10 was based on the time of publication of the article)
The current time volatility is 19 points. It is likely to assume that volatility may increase due to the general information and news background.
Key levels
Zones of resistance: 1.2500; 1.2620; ; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1,3300
Support areas: 1.2430 *; 1.2350 **; 1.2100 **; 1.2000.
* Periodic level
** Range Level
*** The article is based on the principle of conducting a transaction, with daily adjustment.
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