The quote has moved to the stage of the formation of the second stage of recovery with respect to the elongated correction, as far as the sellers still have enough strength - we will analyze this issue in our article.
From the point of view of technical analysis, we see the long-awaited transition to the second stage in terms of restoring quotes relative to elongated correction. Thus, the fulcrum in the face of the level of 1.1080 after a slight fluctuation is still passed, where we rushed towards the subsequent coordinate in the face of the psychological level of 1.1000. In fact, for this period of time, we have 47% of working out with respect to the elongated correction, which is almost a signal for the resumption of the main short positions and assignment of the recovery status. I don't feel like rushing at such a good stage, but nevertheless according to regularities this status is assigned in the range of 50-60% recovery, thereby waiting and hoping.
In terms of volatility, an indicator was recorded yesterday, equal to the average daily point of 55 points, which is a good sign in the form of interest of market participants in trading.
Analyzing the past hourly hour, we see that the main turn of short positions fell on the period 13:00 - 17:00 [time on the trading terminal]. Then there was a slowdown followed by compression to 9 points of amplitude.
As discussed in the previous review, traders were waiting, carefully analyzing price fixing points relative to the frames of 1.1060 / 1.1100. The breakdown of the value of 1.1060, which displays the lower boundary of the main level of 1.1080, nevertheless occurred, where short positions were again laid in the direction of the subsequent control point.
Looking at the trading chart in general terms [the daily period], we see that the 1.1080 / 1.1180 framework, which has been holding us for almost three weeks, has nevertheless fallen, which is a good sign in terms of renewing the main market interest . Let me remind you that the main trend is downward and it originated from the beginning of 2018.
The news background of the past day contained data on applications for unemployment benefits, where the decrease in the number of applications was 10 thousand: Primary 219K -> 211K; Repeated 1,692M -> 1,689M.
The reaction of the market to statistical data completely coincides with the dynamics of the dollar, where there is a synchronous strengthening with the release of applications for unemployment.
The informational background continues the discussion of US-Chinese relations, and so, the earlier news that supposedly Washington and Beijing agreed to gradually reduce mutual duties on the supply of goods turned out to be a duck. The White House has denied numerous reports of agreements.
"To date, there is no agreement on the abolition of existing tariffs as a condition for concluding an agreement on the first phase. The only person who can decide on this issue is President Donald Trump. Everything is very simple, "said Peter Navarro, White House trade adviser
In turn, the European Central Bank has come up with a number of forecasts. So, as follows from the ECB newsletter, the EU economy will continue to grow in the second half of the year, albeit at a slow pace, thanks to private consumption and a small increase in employment. The bulletin also outlined the risks
"Risks for the global economy continues to be downward, amid further escalation of trade disputes, high uncertainty associated with Brexit, and a potentially slower recovery in a number of emerging economies," the bulletin says.
That's not all over the EU, the head of the Austrian National Bank, Robert Holtzman, called for an increase in the ECB interest rate, since negative rates currently give the wrong signal to depositors. It is worth considering that not all ECB members share this kind of opinion.
Today, in terms of the economic calendar, we have only data on the volume of inventories in US wholesale warehouses, where they expect a reduction of 0.3%. This indicator in itself is not strong, and it goes into an inactive session. Also today, the first ever Fed conference will be held on the impact of climate change on the economy. You can read more about the event and the discussion agenda here.
The upcoming trading week in terms of the economic calendar begins rather sluggish, but from Wednesday everything will change. A significant package of statistical data will be released, in addition to the speech of Fed Chairman Powell.
The most interesting events displayed below --->
Wednesday, November 13
Germany 7:00 Universal time. - Consumer Price Index (CPI) (YoY) (oct): Prev 1.1% ---> Forecast 1.2%
EU 10:00 Universal time. - Industrial production
USA 13:30 Universal time. - Consumer price index excluding food products and the United States 16:30 Moscow time. - energy (g / g) (oct): Prev 2.4% ---> 2.5% forecast
USA 16:30 Universal time. - Speech by Fed Chairman Powell in Congress
Thursday, November 14th
Stat statistics package for the EU 7: 00-8: 00 Universal time
EU 9:30 Universal time. - GDP (yoy) 3 q. (preliminary data): Prev 1.1%
USA 13:30 Universal time. - Producer Price Index (PPI) (oct)
Friday 15th November
EU 10:00 Universal time. - Consumer Price Index (YoY) (Oct): Prev 0.7%
USA 13:30 Universal time. - Retail sales
USA 14:15 Universal time. - Volume of industrial production
Analyzing the current trading chart, we see that the sluggish accumulation process that took place in the Pacific and Asian trading sessions led to another surge in prices, but still within the framework of yesterday. In fact, we see a kind of preservation of the existing interest in the phase # 2 of restoration, which is a good sign in the market. In terms of volatility, indicators are still extremely small, but there may still be acceleration. Let me remind you that at the second stage of recovery, the fulcrum is located in the region of the psychological level of 1.1000.
Detailing the available time interval, narrow consolidation with a surge in activity from 8:00 to 9:00 hours [UTC + 0 time at the trading terminal], which signaled the exit from the accumulation.
In turn, traders continue to work in short positions in order to reduce the psychological level of 1.1000.
It is likely to assume that until the price breaks yesterday's low of 1.1036, a chatter within 1.1036 / 1.1055 will remain, where in case of breakdown of the established boundaries a characteristic surge will occur.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in case of clear price fixing higher than 1.1060.
- Sales positions are held towards the level of 1.1000.
Analyzing a different sector of timeframes (TF), we see that the main time intervals on which technical instruments were superimposed signal a downward interest. It is worth considering that indicators for short-term periods at this time are in a variable phase and can be misleading.
Volatility per week / Measurement of volatility: Month; Quarter Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(November 8 was built taking into account the time of publication of the article)
The current time volatility is 18 points, which is a low indicator for this time section. It is likely to assume that in case of breakdown of the established boundaries, volatility can still be shortened, but do not wait for something cardinal.
Resistance zones: 1.1080 **; 1,1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support Areas: 1,1000 ***; 1.0900 / 1.0950 **; 1.0850 **; 1,0500 ***; 1.0350 **; 1,0000 ***.
* Periodic level
** Range Level
*** Psychological level
***** The article is built on the principle of conducting a transaction, with daily adjustment