After consolidating at 1.3000, the downward movement in the GBP / USD pair slowed, which suggests that perhaps, an accumulation is already taking place.
To add to that, traders are in no hurry to enter short positions, especially given the fact that the market is currently unstable, and news could radically change everything in a short period of time.
So, even if there are clear signals that the pound will continue to decline in the market, traders are not risking any medium-term positions to avoid losing profit.
Currently, the main factors that affect the movement and setups in the GBP / USD pair are news on Brexit and coronavirus. Thus, the strategy looks like this: any updates on the hot topics are monitored, then, the interaction levels are analyzed, after which a decision will be made whether to work for an increase or decrease in the pair.
Therefore, if we look at the M15 chart and analyze the trades set up yesterday, we will see that an upward spiral took place at 08: 30-15: 45, during which the quote reached the level of 1.3085. Then, a local slowdown occurred in the pair, and at 17:15, short positions began to rise, in the direction of 1.3020.
In terms of daily dynamics, a volatility of 78 points was recorded, which is 35% below the average level. It should be noted that a slowdown has been observed in the market for four trading days already, so an accumulation and acceleration could very well emerge in the GBP / USD pair.
With regards to news, good data on US durable goods was published yesterday, where a 1.9% increase was recorded, instead of 0.4%. Since durable goods involve large investments, an increase in this indicator may benefit the US dollar in the future.
About the coronavirus, Europe has already recorded a new peak in terms of the number of new infections, as a result of which quarantine measures are being tightened. The UK, where deaths from COVID-19 has the highest rate in Europe, is also showing an increase in the number of confirmed cases of the virus - on October 27, 22,924 cases were recorded, out of a total of 920,664.
On October 15, London already tightened its measures, however, with the current figures, it is possible that additional restrictions will be introduced.
As we can see on the daily chart, an active bearish interest arose during the European session, as a result of which the quote pulled back to the level of 1.3000. If the pair continues to move below 1.2990 in the four-hour time frame, a decline to 1.3000 / 1.3085 will most likely occur, which will then provoke a further downward movement towards 1.2920-1.2860.
Looking at the different sectors of time frames (TF), we can see that the indicators on the minute and hourly periods signal SELL, mainly due to the return of the quote to 1.3000. Meanwhile, the buy signal in the daily period could turn into sell if the price holds below 1.2990.
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 currently at 75 points, which is even lower than the average level by 37%.
Nonetheless, there is a high chance that the market will see an acceleration any time soon.
Resistance zones: 1.3200; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.
Support Zones: 1.3000 ***; 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411).
* Periodic level
** Range level
*** Psychological level
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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