Over the previous trading day, the pound / dollar currency pair showed an underestimated volatility of 68 points, bringing us close to an earlier fulcrum. From the point of view of technical analysis, we see that the amplitude process of 1.2500 / 1.2570 led us to the lower border of 1.2500, which at the same time is the price level in the market. As it was written in the previous review, on July 11 and July 12, traders made a process of fixing the profit received from the corrective move after the price came closer to the accumulation point on July 4-5, where a resistance point was found. Considering the trading chart in general terms (daily timeframe), we see that the clock basis (Impulse — Correction) is rational, being in the flow of the global downward trend.
The informational background for the previous day did not have any loud statements or statistics. Everything went on as usual. We could only observe what was happening and produce a general analysis. The question on the future of the British currency has already been repeatedly raised, where the great difficulties facing Britain were repeatedly said. Everything is as it is. The global downward trend continues its march which is already on the nose of the minimums: 2019, 2018, 2017, and 2016. The quotation goes down. Everything has its time, but the only thing we know for sure is that the winner of the pre-election race for the post of prime minister will be officially announced in the very near future, and then Boris Johnson will push his national currency to a new bottom, if his rhetoric regarding the “divorce” process does not change to another channel.
Today, in terms of the economic calendar, we have data on unemployment in Britain, where, according to a preliminary forecast, the level should remain unchanged at 3.8%. At the same time, statistics will be released regarding the average level of wages excluding bonuses, where growth from 3.4% to 3.5% is expected, and the number of applications for unemployment benefits should be reduced from 23.2 thousand to 18.9 thousand. In general terms, the data for the pound are pretty good for short-term growth, but not anymore. In the afternoon, the United States will release data on retail sales, where they expect acceleration from 2.9% to 3.0%, which can already support the US currency.
Analyzing the current trading chart, we see that the earlier point of support in the form of the level of 1.2500 loses its support under the pressure of short positions. It is likely to assume that after the fixation process, we will gradually decline to 1.2433, which reflects the minimum of the current year and a reference point for a deeper decline in the event of a breakdown. Traders, in turn, are already starting the process of buying short positions with the prospect of a decline. The second honor of traders is planning to take a waiting trading position until the price goes lower than 1.2430.
Based on the available information, it is possible to decompose a number of variations, let’s specify them:
– Positions for purchase are considered in case of price fixing higher than 1.2520.
– Positions for sale are considered already, as the fixing process went below the point of 1.2500, with a primary perspective of 1.2440. As I wrote above, another part of traders is waiting for price fixing lower than 1.2430, for analyzing deeper positions.
Analyzing the different sector of timeframes (TF), we see that the indicators in the short, intraday and medium term perspective have taken a downward position.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(July 16 was based on the time of publication of the article)
The current time volatility is 48 points. Probably, on the background of the inertial course, volatility may increase.
Zones of resistance: 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 *; 1.3000 **; 1.3180 *; 1,3300
Support areas: 1.2430; 1.2350 **; 1.2100 **; 1.2000.
* Periodic level
** Range Level
*** The article is based on the principle of conducting a transaction, with daily adjustment.
The material has been provided by InstaForex Company – www.instaforex.com