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From the point of view of a comprehensive technical analysis, we see that the beginning of the new year welcomed us with really strong fluctuations, where, as expected, the impulsive upward interest came to naught and we saw an equally rapid, but already downward movement . The theory of accelerating volatility as discussed in my previous articles, coincided well and we saw high fluctuations and the average daily amplitude reached 180 points, which is a rejoice on the speculators who probably earned on this show. As a result, the quote indicated coordinates for itself, where the ceiling was the value of 1.3513, and the bottom was 1.2904. In fact, we got the same closed chain 1,3000 / 1,3300, where the quotes are developing to this day, and its volatility is amazing.
From the current theories, we all have the same assumption that the quotes, although has high volatility, are still reserved for the main movements and can still remain on the market as well as the lateral movement with high amplitude.
In terms of the emotional component of the market, we see a reflection of ambiguity, which is confirmed by the structure of the last candles. It is worth considering that although we have an ambiguous mood, this does not prevent us from creating high volatility.
Analyzing the past minute by minute, we see that characteristic impulses were present both in the morning and in the afternoon, the most noticeable fluctuation was from 08:00 - 12:00 UTC [time on the trading terminal]. It is also worth taking a closer look at the H4 chart, where six Doge candles were formed extremely notable.
In terms of trading, we see that the speculative mood prevailed in comparison with other operations, and the minute chart confirms this.
Considering the trading chart in general terms [the daily period], we see that for 127 days the upward trend in the structure of the global downtrend has been preserved. Is it possible to say that we have a turning point in the trend, in some sense, yes, but only one-year-old and by no means global.
The news background of the past day had an ADP report, which reflected the growth of employment by 202 thousand in comparison with 124 thousand in the previous month. It is worth considering that the previous data was revised in favor of growth of 67 thousand going to 124 thousand.
The market reaction to the ADP report was in the complex of the general strengthening of the American dollar, which began even before the publication of the data, which is in fact, at the time the report was released, there was not such a noticeable reaction .
In terms of information background, we have a geopolitical noise associated with Iran, which directly affects the dollar. In turn, no one forgets about the long-running Brexit. So, Yellowhammer's emergency plan of action in the event of a hard exit is removed to the far box, and Boris Johnson is actively negotiating. Yesterday, the Prime Minister of Great Britain met with the President of the European Commission, Ursula von der Leyen, where he outlined his plans to put into effect the agreement on leaving the EU by January 31. At the same time, the prime minister made it clear that he did not intend to extend the transition period after December 31, 2020, arguing that the set period was enough.
"Boris Johnson had a positive meeting on Downing Street with European Commission President Ursula von der Leyen. Regarding Brexit, the Prime Minister emphasized that his primary task is to implement the agreement on leaving the European Union by January 31, 2020. They discussed progress in ratification by the British parliaments and the European Parliament. Johnson said he wants a new positive partnership between Britain and the European Union, based on friendly cooperation, our shared history, interests, and values, "the statement said.
In turn, the head of the European Commission, Ursula von der Leyen, is skeptical of Johnson's idea not to prolong the transition period because there is very little time left to solve all problems.
"The transition period is very, very tough ... therefore, in principle, it is impossible to agree on everything that I mentioned, so we will have to set priorities," the head of the European Commission said.
Today, in terms of the economic calendar, we have data on applications for unemployment benefits in the United States, where a reduction of 34 thousand is expected [Primary: - 3 thousand; Repeat: -31 thousand.]
Further development
Analyzing the current trading chart, we see that after a slight rebound, the descent resumed again, drawing an impulse candle to the side of the psychological level of 1.3000. In fact, the periodic support in the face of the value 1.3079-1.3053 lasted an extremely short time and subsequently served as a strengthening point. At the same time, almost simultaneously with the impulse candle, news came out on Bloomberg, in which information about a very sad situation regarding holiday sales in Britain was revealed, where Marks & Spencer Group Plc, Tesco Plc, and John Lewis Partnership Plc presented their reports. As you understand, everything is very sad, and in time with the publication and the leap of the pound we see synchronism.
Now we will raise the reason, and any horror stories escalate speculators and, as a matter of fact, market volatility.
By detailing the time segment that we have per minute, we see that the main jump occurred at 08:30 UTC [time on the trading terminal].
In turn, speculators have already entered short positions, as soon as the price has overcome the first minimum of stagnation of 1.3079, and the first partial fixation has already occurred at 1.3053, with further retention towards 1.3000.
Having a general picture of actions, it is possible to say that the price has moved to a control rapprochement with the psychological level of 1.3000, having a considerable inertial course. Will sellers be able to overcome the value of 1.3000, while it is not worth making hasty conclusions since local overselling is already on the nose. For starters, we can assume the occurrence of deceleration within the control value.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in case of slowdown and development of the psychological level of 1.3000.
- Sales positions are already being held by many traders and are moving into the stage of full fixation. Further transactions will be considered after the breakdown of the level of 1.3000.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that the indicators are unanimously tuned for a downward movement relative to all-time intervals. In fact, we see confirmation of the general mood of the trading chart.
Volatility per week / Measurement of volatility: Month; Quarter Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(January 9 was built taking into account the time of publication of the article)
The current time volatility is 106 points, which is already a high indicator for this time section. It is likely to assume that if the fulcrum is within the psychological level, volatility may slow down, keeping us at current values.
Key levels
Resistance zones: 1.3180 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Areas: 1,3000; 1.2885 *; 1.2770 **; 1.2700 *; 1.2620; 1.2580 *; 1.2500 **; 1.2350 **; 1.2205 (+/- 10p.) *; 1.2150 **; 1,2000 ***; 1.1700; 1.1475 **.
* Periodic level
** Range Level
*** Psychological level
**** The article is built on the principle of conducting a transaction, with daily adjustment
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