From a comprehensive analysis, we see another slowdown in the area of lows, where downward interest is still a priority. Now, about the details. A steady bearish interest is striking in its stability, where a move of more than 440 points has been formed since the beginning of the year. This value hides not just a movement but the structure of the global trend. So the theory of downward development is now in the center of everyone’s attention since the euro updates local minimums almost on a daily basis. Psychological ranges (1.0700/1.0850; 1.0500/1.0700; 1.0000//1.0350//1.0500) increase the interest of speculators, however, they are alarming since there may be a stop with a reverse surge at any moment. If we consider the theory in terms of the medium-term course, it is too early to worry since the main flow of emotions will come during price fluctuations in the range of 1.0000//1.0350//1.0500 where without the support of the information background, speculators will not get along.
In terms of volatility, we see a sharp slowdown of 35% relative to the average daily indicator and the regularity of past periods has shown that such significant stops bring new bursts of activity.
Analyzing the past day by the minute, we see that the quote has once again passed into the accumulation phase, expressed in the range of 1.0782/1.0810, where the horizontal movement is very similar to the recent fluctuations.
As discussed in the previous review, traders are considering a further downward move, citing the fact that the FOMO syndrome (lost-profit syndrome) will help them in this.
Looking at the trading chart in general terms (the daily period), we see almost a free fall relative to two weeks, which is alarming since the overheating of short positions is visible to the naked eye.
The news background of the previous day included data on producer prices in the United States, where the acceleration was from 1.3% to 2.1% with a forecast of 1.7%. At the same time, construction data came out much better than forecasts. The volume of construction of new homes in January decreased by 3.6% but predicted a reduction of 30.7%. In turn, the number of construction permits issued is growing by 9.2% with a forecast of -0.1%.
The market reaction to the statistics was almost absent, which is surprising, since the indicators were very good, and the dollar had chances to strengthen, as happened with the GBPUSD pair.
In terms of the general information background, we have the publication of the minutes of the January meeting of the Federal Reserve, where a miracle did not happen. The facts about the actions of the regulator were confirmed. What is interesting is that the members of the commission disagreed when assessing the effectiveness of the low-interest rate.
“A number of representatives felt that under certain circumstances, low-interest rates can help maintain financial stability. However, some noted that maintaining low-interest rates may contribute to the vulnerability of the financial system”, follows from the Fed’s minutes.
At the same time, the document says that during the year, the labor market remained strong and economic activity grew at a moderate pace. The number of jobs has been steadily increasing recently, and the unemployment rate has remained low.
In turn, the regulator raised its forecast for GDP growth in 2020 and 2021 against the background of the first phase of the trade deal between the US and China.
Today, in terms of the economic calendar, we have data on applications for unemployment benefits in the United States, where they predict an increase in applications in the amount of 17,000. If the data is confirmed, this may play into the hands of the rollback, which has not been for so long.
Analyzing the current trading chart, we see that the horizontal movement is maintained in the market with variable boundaries of 1.0780/1.0815. In fact, downward interest puts pressure on the quote, like FOMO syndrome, where a technical correction is delayed. There is oversold, however, now it is better to work on the situation or in the medium term to reduce the optimal trading volume.
Detailing the available period every minute, we see that the minimum of the previous day was broken during the start of the European trading session, which confirms the fact of high speculative interest.
In terms of the emotional mood of market participants, we see a high coefficient of speculative operations that came with FOMO.
In turn, medium-term traders are considering a more significant decline with the levels of 1.0700->1.0500->1.0350. Intraday traders also consider the decline but also look at the price dynamics within the current framework.
It is likely to assume that the downward interest will still remain in the market, and if you are working in terms of average earnings, you can not worry about a technical correction. If you do not plan to hold the deal for so long, then work on breaking the set boundaries of 1.0780/1.0815 with the entrance to the impulse candle.
Based on the above information, we will output trading recommendations:
– Buy positions will be considered if the price is fixed higher than 1.0815, with the prospect of a move to 1.0830-1.0850, a local transaction.
– Positions for sale are already held by medium-term traders. Intraday traders are waiting for a break of the mark of 1.0780 with a characteristic impulse.
Analyzing different sectors of timeframes (TF), we see that the indicators of technical instruments are working on a decrease due to the General background of the market.
Volatility for the week / Volatility Measurement: Month; Quarter; Year.
The volatility measurement reflects the average daily fluctuation from the calculation for the Month / Quarter / Year.
February 20 was based on the time of publication of the article. The volatility of the current time is 37 points, which is higher than the dynamics of the previous day. It is likely to assume that if we refer to the pattern of acceleration after deceleration, we have a chance of increasing volatility.
Resistance zones: 1.0850**; 1.0850**; 1.0879*; 1.0900/1.0950**; 1.1000***; 1.1080**; 1.1180; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100
Support zones: 1.0700; 1.0500***; 1.0350**; 1.0000***.
* Periodic level
** Range level
*** Psychological level
***** The article is based on the principle of conducting a transaction, with daily adjustments.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.