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Over the past trading day, the pound / dollar currency pair showed a low volatility of 69 points. As a result, the quotation invariably continued to accumulate. From the point of view of technical analysis, we see an amazing picture: from the beginning of the month, the quotation drove itself into exactly horizontal movement along the mirror level of 1.2150, as a result, having the borders of 1.2100-1.2200 (+/- 20p).
As discussed in a previous review, traders fatally hold short positions, albeit partially fixing them earlier. The ambiguity and external background inspire fear among market participants. However, such accumulations will bear fruit in any case, even if the movement is not downward. Considering the trading chart in general terms (daily timeframe), we see that the "Correction" tact has not yet arrived on the market and the "Impulse" phase is still being kept in a global downward trend.
The information and news background of the past day contained only the housing price index from Halifax in Britain, where we saw a decrease from 5.7% to 4.1%. The most interesting event is the spontaneous criticism of US President Donald Trump against the Fed, where by tradition he put his thoughts on Twitter. The head of the American state once again rode the Fed's working methods, calling them too proud to admit their mistakes. Trump again called on the Fed to lower its base interest rate and stop its ridiculous quantitative tightening right now. This kind of rhetoric from the side of the head of state scares only the crowd, not the Fed, which spilled over into the local strait of the American currency, and even not for all currency pairs. The pound, in turn, continues to be an adherent of the Brexit faith, thereby ignoring the rest of the background.
In the vastness of the UK & EU divorce proceedings, everything is calm and moderate. Everyone is discussing rumors that Boris Johnson is ready to go to the end and that Britain will leave the EU on October 31, even if Johnson gets a vote of no confidence. All the rumors, statements and noise, paired with the horizontal movement of the chart, make us understand that the market is waiting for something worthwhile in terms of information background, or rather an explanation of everything that happens in the actions of all people.
Today, in terms of the economic calendar, we have an amazing day, since nothing worthwhile is published at all. If you suck it out of your finger, then we only have applications for unemployment benefits in the United States, where, in principle, there are no changes. Initial bids remain at 215K, and repeated orders are reduced by 9K. Thus, hope remains only on the information background, and then, in particular, according to Brexit.
Further development
Analyzing the current trading chart, we see the preservation of amplitude fluctuations within the boundaries of 1.2100-1.2200 (+/- 20p), where at the current time the quote is moving towards the upper frame. Traders, in turn, are a little nervous about the prolonged stagnation, which provokes them to temporarily exit the market and considering the method of stretching trading orders relative to existing borders.
It is likely to assume that the fluctuation within the values of 1.2100-1.2200 (+/- 20p) will continue for some time until the circumstances become clear. It should not be forgotten that from the point of view of technical analysis of this kind of accumulation is a harbinger of a strong jump at the moment of breaking the boundaries of the cluster. Thus, the method of waiting and analysis of price fixation points relative to existing borders looks like a worthy strategy.
Based on the available information, it is possible to expand a number of variations, let's specify them:
Positions to buy are considered in case of fixing a price higher than 1.2220, but do not forget that a puncture of this value is not enough. It is the move paired with the information background in the form of pressure.
A similar technique is applied to sales positions, where we monitor the value of 1.2100.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short and intraday perspective are prone to upward movement, but due to the fact that the current fluctuation carries sideways movement, indicators can be changeable. On the other hand, the medium-term outlook invariably signals a downward trend for all indicators.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(August 8 was built taking into account the time of publication of the article)
The current time volatility is 43 points. Volatility will be fixated on the amplitude fluctuation of the price if its formation is maintained. In the event of a breakdown in accumulation, volatility will quickly exceed the daily average.
Key levels
Resistance zones: 1.2150 **; 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; 1.1700; 1.1475 **
* Periodic level
** Range Level
*** The article is built on the principle of conducting a transaction, with daily adjustment
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