For the last trading day, the euro / dollar currency pair showed a high volatility of 62 points, as a result of having a pulse jump. From the point of view of technical analysis, we see that the quote, having felt the periodic support in the area of the level 1.1180, moved to the correction stage, the support point signaled a 20-hour stagnation within the level. As written in the previous review, traders for a long time were short positions, producing partial exits while following, and just at level 1.1180 served as an excellent coordinate to completely withdraw from the transaction, in addition, it was such an important event as the rhetoric of the Fed. Considering the trading schedule in general terms, we have already said that since the beginning of the month, the euro has slipped by more than 150 points without any corrections and kickbacks, overheating of short positions on the eyes. The global downward trend was not low, and it’s developing in its tact.
The news background of the previous day showed a key event which all market participants were waiting for, this is the speech of Fed Chairman Jerome Powell at the hearings in the Financial Services Committee of the US House of Representatives. What did we hear? Mr. Powell announced the termination of asset repurchases will be in September of this year, noting that the uncertainty about the outcome of trade disputes and concerns about the global economy continue to put pressure on the outlook for the situation in the American economy. There was no specifics on the reduction of the key rate in the words of Jerome Powell, although according to various media sources, there is news about the reduction. The only one who announced the rate cut is the head of the Federal Reserve Bank of St. Louis, James Bullard, but it was only after the speech in the Congress of Mr. Powell. Hence the question is, where do we go from here? Recall yesterday’s article , where I wrote in black and white that there could be some kind of emissions or something else that could provoke jumps. Let’s talk more about this. Look at the minute schedule, Jerome Powell spoke in Congress at 14:00 UTC+00. Was there a movement? The answer is NO. The main jump occurred at 12:30 UTC+00, and it lasted for about 2 minutes. Again the question is, who leaked the information? Naturally, there is no answer, thus it remains only to contemplate the schedule.
Returning to the news flow, the only thing that was published was the inventory data at wholesalers in the United States, where they received another increase of 0.4%. We do not take into account the FOMC protocol, since it was already talked about in Jerome’s Powell’s speech, and it was already a post-fact.
Today, in terms of the economic calendar, we have the second speech by Fed Chairman Jerome Powell in the US Congress, where we will again discuss the fate of monetary policy, and perhaps there will be explanations regarding the refinancing rate. The second important event is the publication of the minutes of the ECB Board meeting, where there is a chance to see steps to mitigate monetary policy.
In terms of statistics, there are data on inflation in the United States, where a slowdown is expected from 1.8% to 1.6%.
Analyzing the current trading schedule, we see a steady corrective move, where the quotation has already reached 1.1280, which, in principle, is very good. It is likely to assume that traders are already producing partial closures of their long positions, which kept the value of 1.1240 from the point of stagnation and breakdown. Whether there will be further movement, anything can happen, but you need to tighten restrictive orders in case something goes wrong.
Based on the available information, it is possible to decompose a number of variations, let’s consider them:
– Positions to buy, as written in the previous review, traders lead from a value of 1.1240. If a trade is held, we move the stop to breakeven, with a primary perspective of 1.1300.
– Traders quickly fixed their positions for sale on July 9-10, now we are waiting for a more optimal entry.
Analyzing a different sector of timeframes (TF), we see that the indicators in the short term variably changed to the downside due to stagnation-rollback. Intraday perspective changed interest from descending to ascending due to the last jump. Medium term stably holds downward interest.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(July 11 was based on the time of publication of the article)
The current time volatility is 31 points. It is likely to assume that volatility may increase due to the general information and news background.
Zones of resistance: 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support areas: 1.1180 *; 1.1112; 1.1080 *; 1.1000 ***; 1,0850 **
* Periodic level
** Range Level
*** Psychological 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