By the end of the last trading week, the currency pair pound / dollar showed a volatility close to the average daily 78 points, as a result of having a recovery process.From the point of view of technical analysis, we see that the recent correctional movement from the point of support d in the form of a two-year minimum led us to a value of 1.2557, where the accumulation of July 4 and the finish of correction on July 12 is concentrated. As written in the previous review, many traders have gone into the stage of regrouping trading forces, temporarily moving to long positions from the values of 1.2430 / 1.2400. The process of holding the deals was short, and already in the area of points 1.2500 / 1.2530 the process of fixing the deals went to a complete stop. Considering the trading chart in general terms (daily timeframe), we see that the global downward trend remains in the market. The recent cycle of "correction" has come to an end and traders are waiting for the next cycle in the form of "Momentum".
The information and news background last Friday didn't have comprehensive statistics on Britain and the United States. The information background is preparing to finish the race for the post of leader of the ruling Conservative Party and Prime Minister of Britain, brokerage houses already predict a victory for Boris Johnson, which, in principle, not surprising. Meanwhile, in European capitals, they are concerned about the pressure of Boris in the direction of a "hard" exit. The EU itself declares that it is ready to compensate Ireland's losses in the case of Brexit without a deal. Ireland will receive several billion pounds sterling from the European Commission in the event of a disastrous exit.
Today, in terms of the economic calendar, we have an absolutely empty economic calendar. Thus, we can only hope for a spontaneous information background.
Further development
Analyzing the current trading chart, we see that the recovery process after the correction is in full swing, where the quote is already fixed below the level of 1.2500, providing a sell signal. It is likely to assume that in the case of the preservation of the bearish interest, the downward movement will continue in the direction of the values 1.2440 - 1.2400. Traders, in turn, are already embarking on a gulf of short trades.
Based on the available information, it is possible to decompose a number of variations, let's specify them:
- There are no buy positions at the moment. They will be considered in case of a change in the background and fixation above the highs of 1.2560-1.2580.
- Positions for sale are considered from current values in the direction of 1.2440 - 1.2400.
Indicator Analysis
Analyzing a different sector of time frames (TF), we see that indicators in the short, intraday and medium term are prone to a downward movement due to the recovery process.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(July 22 was based on the time of publication of the article)
The current time volatility is 37 points. It is likely to assume that in the case of a recovery process, volatility may grow by converging with the average daily indicator.
Key levels
Zones of resistance: 1.2500; 1.2620; 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1,330
Support areas: 1.2430; 1.2350 **; 1.2100 **; 1.2000.
* Periodic level
** Range Level
*** The article is based on the principle of conducting a transaction, with daily adjustment
