Over the past trading day, the currency pair pound / dollar showed a volatility of 72 points, having as a result an amplitude with previously set boundaries. From the point of view of technical analysis, we saw another touch of the local maximum on May 27 (1.2746 - Max correction to H4), where the quotation, by regularity, experienced resistance and slowed down, and as a fact, forming a rollback in the market. Looking at the graph in general terms, we see that the recent fluctuation was directly related to the fellow in the euro / dollar market, which at the same time showed sharp jumps due to the information background, while the pound / dollar showed something similar due to the high correlation.
Information and news background had statistics on the level of productivity in the US non-farm sector for the first quarter, where a decline from 3.6% to 3.4% was recorded with a forecast of 3.5%. At the same time, the number of initial claims for unemployment benefits in the US remains at 218K. The locomotive of yesterday's movement was the speech of the ECB Head Mario Draghi regarding the fate of monetary policy, where expectations were high, and as a result, they received another written text. The head of the ECB reiterated that the key rate will remain at the current level until at least mid-2020, but at the same time, he also stated that the Board raised the issue of reducing the rate and resuming the quantitative easing program. However, this is still only at the review stage and the current ECB time follows the original action plan. So why do we consider the actions of the ECB, if we work with the English currency? All due to the high correlation between the currency pairs EURUSD & GBPUSD.
We close the information and news background according to the tradition of Brexit. There were rumors in the media that most EU countries are ready to support the new British deferment to exit the country from the European bloc, as they believe that the new prime minister of the country may need additional time to hold a second referendum on this issue. When will we see the end of this "divorce" process?
Today, the key event of the day is the report of the United States Department of Labor, which will publish data on changes in the number of people employed in the non-agricultural sector in May, where 185 thousand new jobs were predicted compared to the previous period of 263 thousand. We can recall that the ADP report was published on Wednesday, and there we saw a significant decline; and thus, the current data may be even worse. As a result, the dollar may again be under pressure.
The upcoming trading week in terms of the economic calendar is rather saturated with statisticians data, right from the beginning of the week. The most interesting events are displayed below --->
Monday, June 10
United Kingdom 8:30 Universal time - Production volume in the manufacturing industry (y / y) (Apr): Prev. 2.6% ---> Forecast 1.3%
United Kingdom 8:30 Universal time - GDP
United States 14:00 UTC+00 - Number of vacancies in the JOLTS labor market (Apr): Prev. 7.488M ---> Forecast 7.240M
Tuesday, June 11
United Kingdom 8:30 Universal time - Average wage with premiums (Apr): Prev. 3.2% ---> Forecast 3.4%
United Kingdom 8:30 Universal time - Change in the number of applications for unemployment benefits (May)
United States 13:45 UTC+00 - Producer Price Index (PPI) (y / y) (May): Prev. 2.2% ---> Forecast 2.0%
Wednesday, June 12
United States 12:15 UTC+00 - Basic Consumer Price Index (CPI) (y / y) (May): Prev. 2.1%
Friday, June 14
United States 12:30 UTC+00 - Volume of retail sales (m / m) (May): Prev. 3.1%
These are preliminary and subject to change.
Further development
Analyzing the current trading chart, we see that the quote has borders in the form of a local maximum of 1.2746 and a minimum of a recent fluctuation of 1.2668 on May 27. These borders are now in the center of attention of traders, as they are stretched pending orders.
Based on the available information, it is possible to decompose a number of variations. Let's consider them:
- Positions for purchase is considered in the case of price fixing higher than 1.2746.
- Positions for sale are considered in the case of price fixing lower than 1.2668.
Indicator Analysis
Analyzing the different sector of timeframes (TF), we see that the indicators in the short, intraday and medium term, are configured in an upward direction due to all recent fluctuations.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(June 6 was based on the time of publication of the article)
The current time volatility is 38 points. Volatility may be accelerated by data from the United States, but if the quote remains within the specified limits, the volatility will be limited.
Key levels
Zones of resistance: 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 *; 1.3000 **; 1.3180 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700.
Support areas: 1.2620; 1,2500 *; 1.2350 **.
* Periodic level
** Range Level
