Over the past trading day, the euro / dollar currency pair showed moderate volatility within the daily average, resulting in a local surge in the direction of the psychological level. From the point of view of technical analysis, we see a very interesting picture, so for starters, we will look at volatility, which is stably kept at around 60 points (see the summary table at the end of the article). In fact, we see a holding speculative interest, which can only please. Analyzing the past day in detail, we see that the main move came at 14: 00-15: 00 UTC+00 [time at the trading terminal], after which there was a partial recovery and, as a fact, the accumulation of 1.0960 / 1.0990 already in the Pacific and Asian trading session.
As discussed in a previous review, traders worked with alternative trading positions, locally examining the past surge. Earlier short positions were liquidated to a greater extent, and work is already underway regarding the current coordinates.
Considering the trading chart in general terms (daily period), we see a correction phase from the value of 1.0880, which develops mainly in a downward trend. Are there any prerequisites for a trend change? No way, as well as the formation of an oblong correction.
The news background of the past day had a considerable package of statistical data. Thus, in Europe, we have weak data on business activity indices, where in the service sector we recorded a decrease from 53.5 to 51.6. The composite index likewise decreases from 51.9 to 50.1. The statistics for Europe does not end there, and so, after the indices came producer prices, which showed a decline to -0.8, but retail sales came out slightly better than expected, a decline from 2.2% to 2.1%. In the afternoon, data came out for the United States, and not everything is so good there. Thus, the number of applications for unemployment benefits was reviewed for the better, but still recorded growth: primary + 4tys. repeated -5 thousand. The main blow to the dollar declined at 14:00 Universal time, where the ISM index of business activity in the services sector came out, with a clear decline from 56.4 to 52.6.
In terms of informational background, we see a wide discussion regarding the proposal for Brexit by British Prime Minister Boris Johnson. Thus, the President of the European Council, Donald Tusk, said that Boris Johnson's proposal for Brexit does not look convincing, although the EU remains open.
"Today [October 3], I had two phone calls about Brexit, first with Dublin, then with London. My message to Prime Minister Leo Varadkar: We fully support Ireland. My message to Prime Minister Boris Johnson: we remain open, but not convinced" - Twitter @eucopresident
In turn, the British Parliament gave Johnson exactly one week to finalize the existing proposal.
Today, in terms of the economic calendar, the long-awaited day. The report of the United States Department of Labor will be published, which is likely to betray speculators. Thus, according to preliminary forecasts, the indicators should remain at the same level, but if the employment data coincide with the ADP report and we see a characteristic decrease in the number of new places outside the agricultural sector, then the dollar will come under pressure. Toward the close of the working week [18:00 Universal time], Jerome Powell will speak at the Fed's hearings on the problems of population employment and price stability.
The upcoming trading week in terms of the economic calendar stands out only the minutes of the Fed meeting, the data for Europe is practically not available, but the United States has something to sort out.
The most interesting events displayed below --->
Tuesday October 8th
USA 12:30 Universal time. - Producer Price Index (PPI) (YoY) (Sept): Prev 1.8% ---> Forecast 1.7%
Wednesday October 10th
USA 14:00 Universal time. - The number of open vacancies in the labor market JOLTS (Aug): Prev 7,217M
USA 18:00 Universal time. - Minutes of the meeting of the US Federal Open Market Committee
Thursday, October 11
USA 12:30 Universal time. - Basic Consumer Price Index (September)
Friday October 12th
Germany 7:00 Universal time. - Harmonized Consumer Price Index (YoY): Prev 0.9% ---> Forecast 1.0%
Further development
Analyzing the current trading chart, we see that the amplitude fluctuation of 1.0960 / 1.0990 persists even now, in fact reflecting to us a certain expectant position. In turn, speculators are waiting for a distinct breakdown of control points for further trading operations.
It is likely to assume that the current fluctuation will not last so long where trading within it does not make much sense. Thus, the trading method will be built on the principle - analysis of breakdown points of borders.
Based on the above information, we derive trading recommendations:
- We consider purchase positions in case of price fixing higher than 1.1000.
- We consider selling positions lower than 1.0956, with the prospect of a move to 1.0940-1.0900.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short and intraday perspective signal upward interest, but due to the fact that the quotation is in the accumulation stage, indicators can be variable. On the other hand, the medium-term outlook remains downward in the face of the general trend.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(October 4 was built taking into account the publication time of the article)
The volatility of the current time is 24 points, which is the average for this time section. It is likely to assume that the volatility of the day will be locally limited by the previously indicated frames.
Key levels
Resistance zones: 1,1000 ***; 1,1100 **; 1,1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support areas: 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
