After Trump supporters stormed the Capitol last week, the information flow seemed to explode with toxic noise. Literally, we see burning headlines in the media: The impeachment of Donald Trump, The trial of Donald Trump, Social blocking, The Main instigator, etc.
From the latter: the House of Representatives passed a resolution requiring Trump's cabinet to remove him from office, using the 25th Amendment to the Constitution on the inability of the head of state to perform his duties. The news is not new, it appeared yesterday, to which Vice President Mike Pence said that the 25th Amendment was designed for the case of the president's inability to perform his duties or his disability. He, according to Pence, is not a means for punishment or usurpation, and there are only a few days left before Biden's inauguration, Trump's impeachment or resignation will only harm the United States, the vice president believes.
Pence quite rightly said about the inexpediency of actions aimed at overthrowing the current president, the House of Representatives itself spoils the country's image, frightening investors and putting pressure on the national currency.
The toxic noise is actively used by speculators: pay attention to the first half of the American trading session for the EUR/USD and GBP/USD currency pairs.
We see an increase in the volume of short positions in the dollar, as a result of which the euro and pound sterling rates are growing.
Let's analyze the details of market fluctuations.
The EUR/USD currency pair, after finding a pivot point within the support level of 1.2130, entered a stage of prolonged stagnation within the boundaries of 1.2130 / 1.2175, where a cumulative process occurred.
Based on the boundaries of the range (1.2130 / 1.2175), it was pleasant to trade the decision to work on the breakout of this or that border, which resulted in profit.
It should be noted that the exit from the price range occurred just in the first half of the American session, where there was activity on the information flow.
The GBP/USD currency pair did not easily ride on the sale of the US dollar, we saw a full recovery in the price of the pound sterling relative to the corrective move of 1.3702 ---> 1.3450.
This move was due to speculative interest due to toxic information noise, and the pound sterling has been subject to speculation for a long time.
The point in the correction was the breakdown of the 1.3635 mark, which we referred to in the review – "Trading recommendations for novice traders on EUR/USD and GBP/USD for January 13, 2021"
The market dynamics for November 12 amounted to 165 points, which is 23% higher than the average level. The increase in activity is due to the high ratio of speculative transactions.
Prospects for further development
Analyzing the current EUR/USD trading chart, you can see that the move relative to the correction encountered an obstacle in the form of a value of 1.2220, where there was a slowdown and, as a result, a reverse price movement in the direction of correction.
The recovery status of the correction is still far away, market participants need to stay below 1.3130 on the four-hour period. Now we are only talking about an attempt to return sellers to the market, thereby not excluding fluctuations in the amplitude of the past day.
From the point of view of indicator analysis, we see a sell signal relative to the minute, hourly and daily periods.
Analyzing the current trading chart of the GBP/USD, you can see that the area of the local maximum of the medium-term upward trend of 1.3690/1.3705 puts pressure on speculators, which leads to a reduction in the volume of long positions
In the event of a repetition of the natural basis associated with the area of interaction of trade forces 1.3690 / 1.3705, another downward move in the direction of 1.3600-1.3550 may occur.
An alternative scenario of the market development will be considered if the price is kept higher than 1.3710 for a four-hour period, which will lead to the resumption of the medium-term upward trend.
From the point of view of indicator analysis, we see that due to the recovery course and touching the area of the local maximum, the indicators on the hourly and daily periods signal a buy. Minute intervals signal a sell due to the primary pullback from the 1.3690 / 1.3705 area