Since the beginning of the trading week, the market has been ruled by a bearish sentiment, because of which the quote did not only decline below the lower border of the seven-week flat, but also consolidated below 1.1650.
As a result, there are theories that the medium-term trend is now changing from bullish to bearish, and such will lead to a further drop in the rate of the European currency.
So, if we look in the M15 chart, we will see that short positions dropped the quote to the level of 1.1626, after the consolidation below 1.1650.
Such signified a 25% deceleration relative to the average level, which suggests that an acceleration will soon occur, and it would signal a significant change in the trend.
In addition, as discussed in the previous review , traders used the downward consolidation as an impetus to strengthen short positions, as a result of which the quote depreciated to the now price level of EUR / USD - 1.1626.
Meanwhile, with regards to news, a rather bleak report on jobless claims was published, which suggests that recovery in the US labor market is rather slowing. According to the data, initial applications for unemployment benefits rose from 866,000 to 870,000, while repeated applications have decreased from 12,747,000 to 12,580,000.
Today, data on orders for US durable goods will be published, and the forecast for it is an increase of 1.5% in August.
The upcoming trading week is expected to be busy in terms of statistical data:
Tuesday, September 29
US 14:00 - S & P / CaseShiller House Price Index (July)
Wednesday, September 30
EU 10:00 - preliminary inflation (September)
US 13:15 - ADP National Employment report
US 13:30 - Q2 GDP
Thursday, October 1
EU 10:00 - Unemployment rate (August)
US 13:30 - Jobless claims
Friday, October 2
US 13:30 - report on the US labor market
- Non-farm employment change report
- Unemployment rate
- Average hourly wages
Further development
As we can see in the trading chart, the prevailing bearish sentiment has led the quote to reach a price level of 1.1650, and it may decline even further up to levels 1.1550-1.1500. Any news on the coronavirus or Brexit will put more pressure on the pound, hence, it is necessary to monitor upcoming reports.
Indicator analysis
All time frames signal SELL due to the price movement below the seven-week flat.
Weekly volatility / Volatility measurement: Month; Quarter; Year
Volatility is measured relative to the average daily fluctuations, which are calculated every Month / Quarter / Year.
(The dynamics for today is calculated, all while taking into account the time this article is published)
Volatility is at 37 points, which is 54% below the average value.
It is assumed that acceleration will occur, and it will stabilize volatility to about 70-80 points.
Key levels
Resistance zones: 1.1700; 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.
Support Zones: 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***.
* Periodic level
** Range level
*** Psychological level
Also check trading recommendations for the GBP / USD pair here , or brief trading recommendations for the EUR / USD and GBP / USD pairs here .
