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For the fourth day in a row, the euro/dollar currency pair follows the course of 1.1784 / 1.1850, which is part of the main flat range 1.1700 // 1.1810 // 1.1910. The movement allows speculators to accumulate trading volume, which, as a result, will lead to a sharp surge in market activity.
The priority direction at this time is not the main flat, but the price movement along its average level, which is shown on the market as an amplitude of 1.1784/1.1850.
Local operations are considered to be the optimal trading tactics. Its goal is to catch a surge in activity and then leave the market with a profit. Now, traders prioritize working on the main trends.
If we analyze the past trading day by the minute, you can see that the surge in local activity fell on 11:30 - 13:30 UTC+00, where a V-shaped formation appeared in the market.
In terms of daily dynamics, a 21% slowdown is recorded relative to the average volatility level. The average daily activity is 63 points since this week started.
As discussed in the previous review, traders were focused on a local surge of activity at the time of breaking through a particular border of 1.1784/1.1850. A shadow shot of 1.1784 was recorded, but the price was not fixed, and the breakdown was not confirmed. Thus, trading tactics remain the same as the day before.
Considering the trading chart in general terms (daily period), we can see a narrow amplitude fluctuation at the peak of the inertia course, which indicates a slowdown in the medium-term upward trend.
The previous news background had data on the volume of orders for durable goods in the United States in July, where a jump of 11.2% was recorded instead of an increase of 3.9%, which pleasantly surprised investors, but did not fully reflect on the US dollar.
The reason for the lack of reaction to the positive statistics comes from the European Central Bank (ECB), where ECB management member, Isabelle Schnabel, stated the effects of negative rates that were collected over time. From her research, it can be seen that negative rates have their advantages, but with long-term use, a negative effect harms the economy.
The report clearly shows a hint of a change in monetary policy and, possibly, a change from negative rates to positive ones.
Naturally, these are just hints and speculations, but the market senses them.
In terms of the economic calendar, we have today the second estimate of the United States' GDP, which predicts a slowdown in economic growth to -32.9%, which will be considered the deepest recession in history.
At the same time, weekly data on the number of claims for unemployment benefits in the United States, which may be reduced, will be published.
The number of repeated applications for unemployment benefits could be reduced by 394 thousand, from 14 844 000 to 14 450 000.
Meanwhile, initial applications for unemployment benefits may be reduced by 106 thousand, from 1 106 000 to 1 000 000.
In terms of the information background, we expect the annual banking symposium in Jackson Hole, where the Fed's Chief, Jerome Powell, will speak via teleconference. We can expect hints and specifics of the Fed's new strategy from his speech.
Thus, the US statistics are not the best, but because Powell's speech is unclear, we can expect anything.
Further development
Analyzing the current trading chart, a low-amplitude price fluctuation within 1.1784/1.1850 is shown, which was mentioned at the start of the article. It is likely that today is the day when the borders of stagnation will fall, and there will be a surge in activity in the market. The information and news background, in turn, will be the catalyst for the jump and break of borders.
- Buying a pair, after the price consolidates above 1.1850, is recommended, with the prospect of moving to 1.1900.
- Selling a pair, after the price consolidates below 1.1770-1.1780, is recommended, with the prospect of moving to 1.1755-1.1700.
Indicator analysis
Analyzing different sectors of time frames (TF), we see that the indicators of technical instruments on the minute and hourly intervals continue to follow the course of stagnation, having a buy/sell signal. Meanwhile, the daily period also has an unstable signal because the price stayed within the flat 1.1700/1.1910 for so long.
Weekly volatility / Volatility measurement: Month; Quarter; Year
The volatility measurement reflects the average daily fluctuations, calculated per Month/Quarter/Year.
(It was built considering the time of publication of the article)
The current time volatility is 32 pips, which is 62% below the average. The breakdown of the existing range, as well as by the flow of information and news background will provide a rise in volatility.
Key levels
Resistance zones: 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.
Support zones: 1,1800; 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***; 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.
* Periodic level
** Range level
*** Psychological level
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