The euro/dollar currency pair in the euphoric stage has drawn an impulse upward move, having 74 points of volatility at the end of the trading day, which is good news.

From technical analysis, we see an intensive upward move, where the quote is not just in the correction stage, but already has an oblong status. The inertial movement led to the fact that the quotation managed to overcome the second-order correction, rising to the level of 1.1140 and turning a blind eye to the characteristic overbought. We see a light version of the dynamics of the GBPUSD currency pair, where the upward move was expressed in the size of 1000 points, thus the emotional component of market participants reached the single currency.

Analyzing the past day hourly, we see that the sluggish accumulation in the range of 1.1065/1.1085 led to a clear regrouping of trading forces and already in the period of 10:00 – 12:00 hours (time on the trading terminal), there was a surge in the price of 74 points. The subsequent development was in a sluggish lateral oscillation, with an amplitude of just over 15 points.

As discussed in the previous review, speculators all won in terms of profitability. The entry into long positions from 1.1065 (16.10.19) and topping up from 1.1090 (17.10.19) made it possible to form such a profitable position that the exit is not even at the top, it could please even the most fastidious trader.

Looking at the trading chart in general terms (daily period), we see that the 1.0879 quotes managed to bounce off by more than 250 points from the fulcrum, eventually having a phase of oblong correction and pulling the quote into a long wandering process. So, is it worth discussing a trend change already? I believe that no since in global terms a year and a half – the change is insignificant.

The news background of the past day had a package of data on the United States. In the construction sector, we saw an amazing picture in terms of decline. The number of new buildings decreased by 9.4% with the forecast of -8.4%, but the number of building permits pleased with some space data: they predicted a decline of 26%, as a result of the decline was 2.7%. In turn, the number of repeated applications for unemployment benefits is reduced by 10 thousand, and primary applications are growing by 4 thousand. The point in terms of state statistics is industrial production, where there is a 0.1% decline. Frankly speaking, the data on the United States of America is very bad, but in the current development of the quote, the news background played a secondary role.

What happened in terms of background information? Brexit happened in European.

The EU summit on the first day of its beginning blessed the previously worked out agreement on Britain's exit from the European Union. In this case, we are talking about an addition to the agreement, but concerning the vital document "Back-stop" – the border on the island of Ireland, divided between the EU, the Republic of Ireland and the part of the United Kingdom, Northern Ireland. The solution was to prevent the island from having a physical border.

On such a positive outcome, comments of high-ranking EU members rained down, which, from a positive point of view, appreciated the existing result.

Digest from comments:

• "We have a deal. This means that a new extension of Brexit will not be required in any form. This agreement creates confidence where Brexit creates uncertainty and instability. Of course, now the EU and the UK parliaments must approve this document," – European Commission President Jean-Claude Juncker.

• "The document that we have is a compromise on all sides, which, however, can be supported on our part because it implements important conditions, primarily the integrity of the EU internal market, as well as the fact that the Irish Prime Minister for its part, an uncertain compromise was made, thanks to which Ireland can guarantee its interests and at the same time implement and maintain the Good Friday Agreement, that is, there will be no control on the border between Northern Ireland and the Republic of Ireland," – German Chancellor Angela Merkel

• "I am satisfied that we were able to find an agreement," – French President Emmanuel Macron

• "The European Council approved it, and it looks like we are close to the last part of the path," – European Council President Donald Tusk

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The result of the immense information noise is already known to us, a single currency rushed into the upward procession.

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Today, in terms of the economic calendar, we do not have any statistics on Europe and the United States, thus close attention will be paid to the information background and possible comments of politicians. I remind you that an emergency meeting will be held tomorrow in the British Parliament, where the Brexit issue will be resolved in terms of approval or rejection of an agreement. Thus, Monday can begin with colorful impulse steps and naturally the gap.

The upcoming trading week in terms of the economic calendar begins rather boring, but by the end of the week, that is, from Thursday, a revival is expected. Of the most remarkable, we have a meeting of the ECB followed by a press conference, where Mario Draghi will hold his last meeting. In terms of informational background, I do not exclude that pressure on the currency market will continue.

The most interesting events displayed below:

On Tuesday, October 22nd

USA 15:00 London time – Sales in the secondary housing market (September): Prev 5.49M – Forecast 5.45M

On Thursday, October 24th

09:30 London time – German Manufacturing PMI (Oct): Prev 41.7 – Forecast 44.0

EU 09:30 London time – Markit Composite Business Activity Index (PMI) (Oct): Prev 50.1 – Forecast 51.9

EU 12:45 London time – The ECB meeting

EU 13:30 London time – Press conference of the ECB

USA 13:30 London time – Orders for durable goods (Sep): Prev 0.2% – Forecast -1.0%

USA 13:30 London time – Applications for unemployment benefits, primary and repeated

US 15:00 London time – New Home Sales (Sep): Prev 713K – Forecast 691K

Further development

Analyzing the current trading chart, we see a characteristic stagnation in the form of accumulation of 1.1110/1.1130, which led to a clear regrouping of trading forces, as the fact of border breaks. By detailing the hourly available day, we see that the surge came at the start of the European session, which to this day remains on the market.

In turn, speculators, having rested and fixed on the accumulation point, returned to the market again, just working on the breakdown of the boundaries of 1.1110/1.1130, locally having another long position.

It is likely to assume that the variable upward interest will remain in the market, where it is not necessary to be too greedy, since leaving positions for the weekend, you can get trapped in the event of a negative verdict of the UK Parliament on the agreement. That is, locally working on the increase in the direction of 1.1160 – 1.1180, forget about the partial exit and the sliding stop. On Monday, we are working on the situation, fortunately, we will already know the outcome of the meeting in Britain, and depending on the decision, you can locally earn on impulses. I think this is an excellent technique for speculators.

Based on the above information, we derive trading recommendations:

• We consider the buy positions in terms of a small move in the direction of 1.1160 – 1.11180. If we do not have a position, from the moment of the breakdown of accumulation, then it makes no sense to enter. Who already has long positions, do not forget about the stops.

• We consider alternative deals in terms of the methodology described above.

Indicator analysis

Analyzing different sector timeframes (TF), we see that the indicators on all major time intervals retain an upward mood. We see a reflection of the information background and emotional leaving of market participants.

Volatility per week / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(October 18 was built taking into account the time of publication of the article)

The current time volatility is 32 points, which is the average for this time section. It is likely to assume a convergence with the daily average in terms of volatility, but I do not see any excess of this value or sharp fluctuations, and perhaps they will not.

Key levels

Resistance zones: 1.1180*; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.

Support zones: 1.1100**; 1.1000***; 1.0900/1.0950**;1.0850**; 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level

**** The article is based on the principle of conducting transactions, with daily adjustments.