The GBP/USD pair continues to follow the natural basis associated with the support level of 1.2860, where the quote has dared to fall four times under the influence of trade forces within the coordinate 1.2860 in just two weeks.
The high activity associated with the emotional informational background of Brexit and COVID-19 led to the disruption of some technical tools, but at the same time, the flow of speculation increased, which led to the conditional limits of fluctuations. The limits are 1.2860/1.3060/1.3080, where there was a regular decline in trade volumes.
As long as the pressure of the information background does not decrease, the market will continue to work on the flow of speculative impulses. We can only follow them without focusing on medium-term positions.
For hot topics, we can monitor Bloomberg, Wall Street Journal, and Reuters which serve as a tool for predicting market mood.
The coordinates 1.2860/1.3060/1.3080 remain as the points of interaction of trading forces, where the most notable moment will be their breakdown.
Analyzing Friday's fifteen-minute period, all the activity came on one candlestick at 10:45 UTC+00, where the quote locally showed downward activity in the amount of more than 90 points. After that, there was a recovery, followed by a slowdown.
In terms of daily dynamics for October 16, an indicator of 96 points is recorded, which is exactly the same volume that appeared before 10:45 UTC+00. There is a slowdown relative to the daily indicators (-21%). On the other hand, there is a high degree of speculative mood in terms of short-term periods.
Looking at the trading chart in general terms (daily period), you can see that the quote, as before, is on the flow of the corrective move from the local low 1.2674, where the high is 1.3081.
For the news background, US retail sales data was released last Friday, the growth rate of which was supposed to slow down from 2.6% to 2.2%, but with its previous revision, it accelerated from 2.8% to 5.4% Thus, the market reacted immediately in favor of the dollar strengthening.
In terms of information flow, the EU summit was already completed where the main topic was the Brexit issue and trade negotiations. So, the leaders of the EU agreed that negotiations should be carried out, but the deal should not be reached at any cost, which actually meant that the EU was not ready to make concessions to Britain.
During Friday's press conference in Brussels, Michel Barnier said that they are working in the direction of negotiations and are ready to continue them, following the conclusion of the two-day summit of the European Council.
In turn, British Prime Minister Boris Johnson said on Friday that his country is not ready to make concessions to Europe and is ready to leave without a deal, since European colleagues cannot conduct serious negotiations.
As you can see from the above material, the Brexit negotiations are not just stalled, but also moving in the opposite direction.
In terms of the economic calendar, we do not have statistical data worthy of attention today; thus, the main task will be to monitor hot topics (Brexit, COVID-19) for new statements.
Further development
Analyzing the current trading chart, it can be noted that there was an impulsive upward move during the start of the European session, which returned the quote within the range of 1.2980. In fact, we are dealing with regular speculations, where further movement in the direction of 1.3000-1.3060 is excluded, depending on the volume.
After that, we can expect a sharp stop and reversal, which is typical after speculative fluctuations.
Indicator analysis
Analyzing different sectors of time frames (TF), we see that both hourly and minute time frames have a buy signal due to a speculative price surge. In turn, the daily TF has a buy signal due to the price approaching the level of 1.3000.
Weekly volatility / Volatility measurement: Month; Quarter; Year
The volatility measurement reflects the average daily fluctuations, calculated per Month / Quarter / Year.
The dynamics of the current time is 94 points, which indicates high dynamics and speculative excitement. Activity will continue to grow as traders from the side enter the market.
Key levels
Resistance zones: 1.3000 ***; 1.3200; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support zones: 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411).
* Periodic level
** Range level
*** Psychological level
