From the point of view of a comprehensive technical analysis, we see a bright V-shaped oscillation, where the previously set forecasts coincided 100%, as a result, a relatively small but still profitable. So, working at the phase of mining the resistance area of 1.2950 / 1.3000, the quotation managed to go down to a mirror level of 1.2885 [50% relative to the flat of 1.2770 / 1.3000], where the support was expectedly found. As a result, the quotation continued to oscillate in the upper part of the flat 1.2885 / 1.3000, having a rather impulsive upward move. What has changed, you ask, nothing, the quotation is still clamped within the flat and builds its swing relative to key levels of 1.2770 // 1.2880 // 1.3000.
In terms of volatility, unfortunately, we cannot distinguish any drastic changes, we are still below the average level, but at the same time, the emotional component of market participants, on the contrary, has changed significantly. So, pay attention to the structure of hourly candles, where for more than a week on a daily basis there are impulse moves, which is a good sign for the future acceleration of volatility.
As discussed in the previous review, many speculators worked downward from the 1.2950 / 1.3000 area, where the top-up in the position occurred at the moment of passing the 1.2898 mark, and transactions were fixed within the mirror level of 1.2885. I do not exclude the possibility that some traders also managed to work on the subsequent bounce from the mirror level.
Considering the trading chart in general terms, the daily period, we see the same flat formation of 1.2770 / 1.3000, lasting more than 6 weeks. Once again, we have confirmation that a characteristic uncertainty remains in the market, where market interest is growing on a weekly basis in the hope of an early breakdown of borders.
The news background of the past day contained data on lending in Britain, where the number of approved mortgage loans decreased from 65.80K to 64.60K, and the volume of consumer lending by the Bank of England, on the contrary, grew from 0.785B to 1.326.
Market reaction to statistical data was practically absent due to the preserving information background.
Analyzing the information flow, we see the terrible terrorist act in England that occurred on Friday and were against this background, Prime Minister Boris Johnson decided to further strengthen his position in the election race to the British Parliament. So, in the incident, he indirectly blamed the policy of the Labor Party, who introduced technical substantiation to the legislation, which allowed the early release of the terrorist.
In fact, all of Jeremy Corbyn's subsequent comments regarding the event no longer mattered, as Johnson indicated that, when he won, he would tighten prison sentences several times and would no longer allow that.
As for the pre-election race, another BMG poll took place last Saturday, which showed that the conservatives lost 2% of the vote and currently they have 39%. Labor, on the contrary, jumped 5% and currently, they have 33%.
In turn, the Federation of British Industry believes that the Brexit deal, which is supported by Boris Johnson, could help untie the hands of investments that have recently been leaving the country.
Today, in terms of the economic calendar, we had an index of business activity in the UK manufacturing sector, where we recorded a decrease from 49.6 to 48.6 with a forecast of 48.3. In the afternoon, similar PMI data will be released, but for the United States, where growth from 51.3 to 52.2 is expected.
Further development
Analyzing the current trading chart, we see that the night gap was closed in the morning, and the quotation continued its mixed movement, where the movement was conditionally horizontal. The actual recent gap plays the role of resistance, increasing the influx of short positions, and the breakdown of the minimum of the 1.2909 cluster was a certain starting point. In terms of volatility, there is a characteristic acceleration, but still within the average. In turn, speculative interest remains in the market, which may just give the dynamics of further acceleration.
Detailing every minute movement, we see that the first candlestick opened with a gap of 22 points, after which there was a narrow stagnation of 6 points, and at the time of the start of the Europeans the gap was closed, with acceleration from it.
In turn, speculators are counting on a further decline in quotations in the direction of the mirror level of 1.2885.
Having a general picture of actions, it is possible to assume that, relative to current points, special attention is paid to the value of 1.2909, since at this time it plays the role of a possible variable level. Thus, if it is possible to hold on and not fix higher than 1.2925, then a move to the mirror level of 1.2885 will be possible.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in case of price-fixing higher than 1.2925.
- Sales positions are considered in case of price fixing below the area of 1.2909-1.2900
Indicator analysis
Analyzing a different sector of timeframes (TFs), we see that the indicator's are aimed at upward interest, due to the fact that the quote remains at the top of the flat formation. If the quotation still manages to return to the limits of the mirror level, then the interests in terms of intraday consideration may change.
Volatility per week / Measurement of volatility: Month; Quarter Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(December 2 was built taking into account the time of publication of the article)
The volatility of the current time is 14 points, which is still an extremely low value for this time section. It is likely to assume that acceleration of volatility is still possible in the case of strengthening and moving to the area of the mirror level.
Key levels
Resistance Zones: 1.3000; 1.3170 **; 1.3300 **.
Support Areas: 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
*** The article is built on the principle of conducting a transaction, with daily adjustment
