The psychological level of 1.1000 continues to tickle the nerves of traders for five consecutive days, but as a result, without a clear signal: a breakthrough or a rebound?
From the point of view of technical analysis, we see a real battle not for life, but for death, where traders have been trying to break the psychological level of 1.1000 for five consecutive days in a row, but as a result of having useless punctures without the possibility of retention. Thus, the stage [# 2] of restoration with respect to the elongated correction, turned out to be much stronger than many thought and the theory of repetition of the plot with stage # 1 made sense. If we move the chart to the past and look at the time interval of November 5-7, we will see that the 1.1080 step was not so simple, and even during inertia the sellers were not able to take the bar the first time and only we saw the field of subsequent moves transition from step # 1 to step # 2. It's worth considering that before the passage of the first degree we highlighted a significant stop, which reflected the transition of an oblong correction to recovery itself, now we see a slight stagnation / rollback, no more. Of course, if we develop the recovery theory in general terms, then the most durable steps are the first and last, which is between, are variables. However, in this case, we have a variable point in the face of a strong psychological level of 1.1000, which makes the process a little more difficult.
In terms of volatility, we do not see drastic changes, compared with November 13. There is a characteristic improvement, but nevertheless, the market dynamics is 27% lower than the average daily indicator. In turn, the emotional component of market participants is at a low start, everyone expects from the current stagnation something more than a sluggish swing.
Analyzing the past hourly hour, we see that even with such a low amplitude there were also impulses. Thus, the morning stretch of time was lit up and down in jumps against the backdrop of European statistics. Then a slight stagnation and a final upward surge of 14:00 - 17:00 [UTC+00 time on the trading terminal].
As discussed in the previous review, many traders have already entered short positions, hoping for a breakdown of the control level. Others are waiting for a clear fixation of prices lower than 1.0990, which did not happen. Third traders immediately consider two developments: a breakdown or a rebound, using the coordinates 1.0030 / 1.1035 - Buy and 1.0990 - Sell.
Considering the trading chart in general terms [the daily period], we see that the recovery process is preserved in the market, where there is about 50% of mining relative to the elongated correction. In the medium term, downward interest remains as the mood of market participants.
The news background of the past day contained a second estimate of European GDP for the third quarter, where the data were confirmed at 1.2% with a forecast of a slowdown to 1.1%. A few hours before the general publication, German GDP was released, where it recorded growth from 0.3% to 0.4%. In the afternoon, the United States reported producer prices, where they forecast a decline from 1.4% to 0.9%, but as a result they got better data, 1.1%, which, by the way, was what we expected in the previous review. Applications for unemployment benefits in the US grew by 4 thousand, but globally this is insignificant: Primary +14; Repeated -10 thousand
The market reaction to statistics surprised market participants once again. Thus, in Europe, everything is clear. The reaction was only on data on Germany, but in the United States there was some kind of estrangement from positive data once again. Let me remind you that the statistical data on inflation in the United States also remained without attention.
The information background continues to revolve around US-Chinese relations. Earlier, we wrote that the Ministry of Commerce of the People's Republic of China Gao Feng confirmed the negotiations between the two countries. The main issue is the mutual removal of increased duties. So, there was a comment from the White House in the person of economic adviser Larry Cadlow, who said: "We are close to this ... The mood is very good, which was not always in such things." Details of telephone conversations between Washington and Beijing, Cadlow refused to disclose, the only thing he said: "The deal is not ready yet, but we are seeing very good progress, and the negotiations themselves were very constructive."
At the same time, Fed Deputy Chairman Richard Clarida said during a conference on monetary policy at the Cato Institute in Washington, that the regulator is considering all sorts of methods that can help in the event of a downturn.
"In addition to assessing the effectiveness of existing tools, the review looks at additional tools to mitigate policy when an effective lower bound is mandatory," said Richard Clarida
Finally, a few comments regarding Brexit. Recently, on the European side, we have heard more and more often many statements regarding the good agreement that was proposed to Britain, as well as the unity and removal of England. So this time, this time, the newly elected President of the European Parliament David Sassoli gave his comment, who said that the calculations of the Brexit supporters did not materialize, because discussions about Britain's exit stimulated EU members to come to a common opinion.
"Like the nationalists on the continent, Brexit supporters thought they would destroy the European Union. Instead, despite the fact that we are discussing all issues in the EU, we had a common opinion on Brexit, "said David Sassoli
Today, in terms of the economic calendar, we have data on inflation in Europe, where, according to forecasts, they expect a decrease from 0.8% to 0.7%. In the afternoon, we are waiting for data on retail sales in the United States, where they forecast a slowdown from 4.1% to 3.8%. The flow of statistics is completed by data on industrial production in the States, where the decline should accelerate from -0.1 to -0.4.
The upcoming trading week in terms of the economic calendar conditionally starts from Wednesday, when the minutes of the Fed meeting are published, and then, due to the late release of the document, activity should be expected on Thursday, where at the same time the minutes of the ECB meeting will be published. At the same time, do not forget about the information background regarding US-Chinese relations and the eternal Brexit.
The most interesting events displayed below --->
Tuesday November 19
USA 13:30 Universal time - Number of building permits issued (Oct): Prev 1,391M ---> Forecast 1,385M
USA 13:30 Universal time - The volume of construction of new houses (October): Prev. 1.256M ---> Forecast 1.300M
Wednesday, November 20
19:00 Universal time - Protocol of the meeting of the US Federal Open Market Committee
Thursday, November 21
12:30 Universal time - Publication of the minutes of the ECB meeting on monetary policy
USA 13:30 Universal time - Sales in the secondary housing market (Oct): Prev 5.38M ---> 5.43M forecast
Friday November 22
7:00 Universal time - German GDP
8:30 Universal time - The index of business activity in the manufacturing sector (PMI) in Germany (November)
EU 9:00 Universal time - Composite Business Activity Index (PMI) by Markit (Nov)
USA 14:45 Universal Time - Markit Composite Business Activity Index (PMI) (Nov)
Further development
Analyzing the current trading chart, we see that due to yesterday's local jump, the quotation managed to grow a little, but felt variable resistance in the region of 1.1030. The existing fluctuation is expressed in stagnation, where conditionally the quote continues to focus on the psychological level of 1.1000. In this situation, considerable indecision to actions can be seen, at the same time, high expectations of the upcoming surge relative to the control level. Thus, the emotional mood and market volatility is at a low start, which is what traders are advised.
By detailing the available time interval, we see a narrow fluctuation of 1.1015 / 1.1030, without any significant price spikes.
In turn, traders continue to hold short positions with the hope of breaking the ill-fated level of 1.1000. But not everyone turned out to be so strong adherents of the Bears, and alternative positions are being actively discussed.
It is likely to assume that there is still a chance of quotes returning back to 1.1000, but we are more interested in the breakdown of this very level, where it is not so simple. Thus, the main positions remain lower, where trading volumes will rise if prices are fixed lower than 1.0990 - no puncture shadow. At the same time, due to alternatives and local moves, an upward movement is considered, but only in the case of price fixing higher than 1.1030-1.1045.
Based on the above information, we derive trading recommendations:
- Buy positions are considered in terms of alternative operations. Points of consideration will be in the region of 1.1030-1.1045.
- Market participants are already holding positions for sale, where it is not worth having excessive trading volumes at this stage. If we don't have any deals, it makes sense to wait until the price fixes below 1.1090 / 1.1080. Perspective: 1.0950 variable stage; The main finishing stage of recovery is 1.0880.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see a characteristic multidirectionality, where the short-term and intraday periods are stagnant, but the medium-term period reflects the recovery process.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(November 15 was built taking into account the time of publication of the article)
The volatility of the current time is 14 points, which is an extremely low value for a given period of time. We continue to take a waiting position in terms of detecting acceleration.
Key levels
Resistance zones: 1,1000 ***; 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
