Over the past trading day, the pound / dollar currency pair showed a low volatility of 60 pips while maintaining a general downward interest in the market. From the point of view of technical analysis, we see that the quote has entered the recovery phase, working out at the moment as much as 50% relative to the early corrective movement.
As discussed in a previous review, speculators rejoice as the dynamics return to the market. The recovery process has already made it possible to repeatedly take profits at the time of the jump on August 28 and the subsequent laying of short positions to the level of 1.2150. I think this is only the beginning, as with the onset of autumn it will become even hotter. Considering the trading chart in general terms, we see that the "Impulse" tact return theory is no longer a theory, but perhaps a fact. Overcoming the 1.2150 level will confirm the theory, and our global downward trend will continue the recovery phase, where it will face a key value in the form of the psychological level of 1.2000.
The news background of the past day contained data on the second estimate of GDP (2Q) of the United States, where they expected a slowdown to 2.2%, but as a result, the indicators remained at the level of the first estimate of 2.3%. As a result of which, there was no pressure on the dollar.
Overheated information background is trying to realize everything that is happening on the "planet" - Brexit. So, while Boris Johnson rejoices at his steps in the form of sending Parliament "back home", the opposition is not asleep and is trying to open up the public as deafeningly as possible. Thousands of protesters of the regime of the new government took to the streets of London, and in a matter of days, over 1.5 million petition signatures were collected against the suspension of the work of the British Parliament. If we analyze the topic of collecting signatures, we see that the petition itself was posted on August 6, but the flurry began just at the time the Queen's verdict was announced.
In turn, the leader of the British opposition Labor Party, Jeremy Corbyn, has not yet taken solid steps, except to stir up panic in the public. Perhaps, this is a kind of strategic move and we will soon see it in action. On the eve of Jeremy Corbyn said that on September 3, he would raise the issue of parliamentary confidence in the Prime Minister and would propose introducing bills that would prevent the country from leaving the EU without a deal. But it is worth considering that such a moment with the approval of Queen Elizabeth II, the throne speech is postponed to October. And in fact, the parliament does not work, and violation of the traditions of the kingdom can raise a new wave of protests.
As we can see, the information background is so strong that a certain uncertainty remains in the pound / dollar pair caused by fear and panic, and all further fluctuations will be caused solely by this very background, turning a blind eye to all the associated statistics.
Today, in terms of the economic calendar, we have worthwhile statistics for Britain and the United States, and they, in principle, are not needed, since the information background dominates the market.
The first week of autumn is expected to be hot in terms of the economic calendar, we have a lot of statistics both in the United States and in Britain, but if this is not enough for us, then the information background will be supported by the pressure of the beloved Brexit.
The most interesting events displayed below --->
Monday, September 2
Great Britain 8:30 Universal time - Manufacturing PMI (Aug): Prev 48.0
Tuesday September 3
Great Britain 8:30 Universal time - Index of business activity in the construction sector (Aug): Prev 45.3
USA 14:00 Universal time. - Manufacturing PMI (ISI) from Aug (Aug): Prev 51.2 ---> Forecast 51.4
Wednesday, September 4
Great Britain 8:30 Universal time - Markit services sector business activity index (Aug): Prev 51.4 ---> Forecast 50.2
Thursday, September 5
USA 12:15 Universal time. - ADP Private Sector Employment Report (Aug): Prev 156K ---> Forecast 140K
USA 12:30 Universal time. - Initial applications for unemployment benefits (Aug 30)
USA 12:30 Universal time. - Number of repeated applications for unemployment benefits (Aug 23)
Friday September 6th
USA 12:30 Universal time. - The number of new jobs created outside of agricultural (Aug): Prev. 164K ---> Forecast 155K
USA 12:30 Universal time. - Unemployment Rate (Aug): Prev 3,7%
Further development
Analyzing the current trading chart, we see a typically restrained downward interest, where the quote has already reached the predicted level of 1.2150. Speculators continue to work on the decline, having already enough profitable trades. Further steps will be considered after a clear fixation of the price below 1.2150. Conservative traders are watching from the side, but are already beginning to wake up smoothly, since for them the center of attention is this fluctuation is valuable relative to the key level in the form of a psychological mark of 1.2000.
It is likely to assume that the fluctuation near the level of 1.2150 will still remain for some time, but the analysis of its breakdown is our main task for setting further trading orders. The next points that interest us are 1.2090 and 1.2000.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in terms of deceleration and temporary development of the level of 1.2150, where the formation of an amplitude of 1.2150-1.2220 is possible. Something more worthwhile should be counted on only in the case of the appearance of an information background from Corbin.
- Sales positions are considered in the case of price fixing lower than 1.2150, with the prospect of a move to 1.2100 ---- 1.2000 (+/- 30 points).
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short and intraday perspective are prone to decline, which reflects the restoration of quotes. The medium term, in turn, belatedly reflects the recent stage of correction.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(August 30 was built taking into account the publication time of the article)
The volatility of the current time is 27 points, which is a low value for this time section. It is likely to assume that the basis for increasing volatility is in the form of an informational background, but fear and uncertainty press on the market, thereby we see a characteristic restraint.
Key levels
Resistance zones: 1.2350 **; 1.2430; 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 *; 1,3000 **; 1.3180 *; 1.3300
Support areas: 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
