22.10.201909:49 Forex Analysis & Reviews: Trading recommendations for the GBP/USD currency pair - placement of trade orders (October 22)

Over the past trading day, the pound / dollar currency pair showed a high volatility of 137 points. As a result of which, there was a repeated test of the psychological level. From the point of view of technical analysis, we see a rather interesting picture, so the upward trend, expressed in almost vertical movement, reached the subsequent psychological level of 1.3000, where the strength test was repeatedly performed, but the level still withstood the onslaught of customers. In turn, the dynamics of volatility for the second day in a row [Oct 18. -144 points; Oct 21 - 137 points] reduces the amplitude, which just reflects the pressure from the psychological level of 1.3000. If we consider it abstractly, then a high volatility indicator is held on the market as early as 8 trading days, which cannot but rejoice, in terms of possible profitability. From the point of view of crowd psychology, we see that the integral role of such high indicators in terms of volatility was played by emotions against the background of the information flow, which betrayed the inertia of the movement, at times raising volatility.

Analyzing the past day, we see that after an insignificant pullback of 1.2947 ---> 1.2874, another price surge occurred, which occurred in the period from 06:00 - 8:00 [UTC+00 time on the trading terminal]. After which the market went into a slowdown stage, having a relatively narrow amplitude of 55 points.

As discussed in a previous review, speculators were more likely to be waiting, clearly fixing prices above the psychological level of 1.3000, but this did not happen. In turn, early traders managed to ride in the morning rally, where it was possible to open short-term deals due to local stagnation [1.2874 / 1.2920], using the breakdown method, the deals were already closed at the moment of approaching the level of 1.3000.

Considering the trading chart in general terms [the daily period], we continue to observe the striking vertical course, where, from the point of view of technical analysis, a trend is changing in the history period of a year and a half. If we develop the theory of a fracture of a trend solely on the basis of technical analysis, the fact that a breakdown of the second-order correction has occurred confirms the theory. However, such a strong inertial course, without any significant corrections, can provoke instability of long positions and, as a result, an avalanche-like fixation, which will lead to a sharp recovery in short positions.

The news background of the past day had an empty economic calendar, while statistics for the UK and the United States were missing.

The informational background continued to show a riot of colors regarding Brexit. Thus, this time, an attempt by Prime Minister Boris Johnson to force the deputies to vote once again for his exit proposal failed. Moreover, Lower House Speaker, John Bercow, reffered to parliamentary rule in 1604, under which the government cannot re-ask parliament to vote on the same initiative. Eventually, Bercow blocked the vote and reminded Johnson that the situation has not changed since Saturday.

In turn, Boris Johnson most likely expected such a turn, since he did not appear at the meeting in parliament, but instead he was sent by Brexit Minister Stephen Barclay. This kind of step further outraged the deputies, the leader of the Scottish National Party parliamentary faction in the British Parliament, Ian Blackford, expressed interest in the whereabouts of the prime minister.

Today, in terms of the economic calendar, we have data on sales in the secondary housing market in the United States, where they forecast a slowdown of -0.7% in September. Most likely, the statistics will turn out to be a secondary background again for the pound sterling, since all the main attention is focused on the divorce process. Thus, Prime Minister Boris Johnson will have a new chance to push through his Brexit deal. Today, a multi-level discussion and voting in the British Parliament starts, which will last three days.

• October 22 - the second reading of the bill, the beginning of the work of the bill committee.
• October 23 - continuation of the proceedings on the bill withdrawing funds from the European Union.
• October 24 - completion of the proceedings on the bill to withdraw from the European Union.

Further development

Analyzing the current trading chart, we see a characteristic slowdown within the psychological level of 1.3000, where the quote is trying to work out the coordinates as resistance, but still showing little activity.

By detailing the fluctuations we see that since the last touches of the level of 1.3000, 16 hours have passed and the volatility has not changed in this time. That is, there is a clear wariness in actions, expressed in a stop, which can only go in the hands of speculators who will receive the most suitable point for entering the market.

In turn, speculators took a waiting position, working on the existing accumulation [stagnation] of 1.2950 / 1.3000. The working method of detecting local impulse which breaks the boundaries.

It is possible to assume that the characteristic stagnation of 1.2950 / 1.3000 does not last long and today, we will see a change in the existing borders. The trading method is built on the tactics of "Breakdown of borders", working locally on an impulse. At the same time, the technique of monitoring the news feed for information regarding Brexit is retained, since the background is almost the main driver of recent fluctuations.

Based on the above information, we concretize trading recommendations:

- Buying positions are considered in the case of price fixing higher than 1.3020, on an inertial course.

- Selling positions are considered in the case of price fixing lower than 1.2940.

Indicator analysis

Analyzing a different sector of timeframes (TF), we see that indicators on the intraday and medium term invariably retain upward interest, due to the strong inertia. In turn, short-term gaps signal a variable downward interest, due to available accumulation.

Volatility per week / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(October 22 was built taking into account the time of publication of the article)

The volatility of the current time is 29 points, which is an extremely low indicator for this time section. It is likely to assume that the volatility will still remain at high uranium, having an indicator equal to or higher than the average daily value. The pressure from the background of information in a compartment with emotions will help to overtake FOMO into the market.

Key levels

Resistance Zones: 1.3000; 1.3170 **; 1.3300 **.

Support areas: 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

*** The article is built on the principle of conducting a transaction, with daily adjustment