Over the past trading day, the EUR / USD currency pair showed a high volatility of 70 points. As a result, it is locally going down to the psychological level. From the point of view of technical analysis, we see an amazing picture. The flat accumulation 1.1015 / 1.1065, which held us for four trading days, was nevertheless broken downwards with the help of pulsed candles and a drop of informational background, but more on that later. The most interesting thing is that the impulse movement, although it had a remarkable shape and basis, it still could not break through the psychological level of 1.1000. Thus, the recommendation in the plan not to rush and wait for a clear fixation of the price below 1.1000, was out of place.
As discussed in the previous review, speculators sat idle for several days, waiting for a clear breakdown of the existing boundaries of 1.1015 / 1.1065. Thus, it came. The prospect in this case was small, and already in the level of 1.1000 and went profit fixation. The main positions are already outlined beyond the psychological level of 1.1000. Considering the trading chart in general terms (the daily period), we see that there are hints of a change in the market tact Correction ---> Impulse. In fact, there is already a discussion that in the event of a breakdown of the psychological level of 1,1000, with the support of the information background. The global downward trend will continue its march in the market. Let's see what will happen next.
The news background of the past day contained data on producer prices in the United States, where they initially predicted growth, but the data was revised and indicated a retention of 1.7%. According to the results of the publication, we see that the growth nevertheless occurred from 1.7% to 1.8%, which locally supported the dollar, which was also already so expensive. So what was the basis for the growth of the dollar? - The reason is the information background. So, back in yesterday's review, we first hand picked up the news. Thus, to speak, an emotional discharge, from the beloved Bloomberg, with a resounding title - "The ECB is preparing to do great damage to banks" from the original source. So, the article colorfully described how the ECB's actions in terms of reducing the deposit rate will hit the banking sector of the European Union. Comments were given by major banks, including Deutsche Bank, who said that such a policy could cost them hundreds of millions of euros only in 2019. Naturally, the quotation could not hold on such a thin market, and we saw an impulse move, where the American statistics subsequently supported the dollar.
To all that was available in favor of strengthening the dollar, news began to play about easing pressure in terms of a trade war between the US and China. Therefore, countries on the evening of a new round of trade negotiations decided to temporarily postpone the increase in duties. This is the case in the United States, which delayed the introduction of new duties on Chinese goods until October 15. China, in turn, freed some goods from the United States from duties: drugs, lubricating oils and medicines, medical linear accelerators of charged particles, as well as shrimp caviar, fishmeal for feeding livestock and other items. Charges paid on them will be refunded.
In general terms, we see that the American dollar has support again and may be one of the leaders in growth. We continue to monitor what is happening so as not to miss a good opportunity to earn.
Today, in terms of the economic calendar, we have a key event of the week: a meeting of the Board of the European Central Bank, where traders are preparing to lower the deposit rate, as well as hints about the resumption of the quantitative easing program. In fact, there are plenty of reasons for such steps; this is both a slowdown in economic growth and weak inflation in the eurozone, and we have not yet touched on the Brexit divorce process. Thus, we are waiting for clarification from the head of the ECB, Mario Draghi, perhaps he will be able to surprise us today.
EU 11:45 Universal time - Deposit rate (September): Pre: -0.40% ---> Prog. -0.50%
EU 12:30 Universal time - Speech by the head of the ECB, Mario Draghi
Further development
Analyzing the current trading chart, we see that the psychological level of 1.1000 plays the role of a temporary support, relative to which a pullback is forming. Movement in the form of a rebound is normal in anticipation of important events. Also, I do not exclude that the amplitude can also expand. Speculators, in turn, are waiting for price fixing below 1.1000, where the process of pumping up short positions will continue.
It is likely to assume that the quote on the night of the meeting may temporarily be in a fever within 1.1000 / 1.1030, and sharp movements in terms of trading are now not welcome. Thus, we follow the news feed and price fixing points, trying to get into the main course of the market.
Based on the above information, we derive trading recommendations:
- Buying positions can be considered, but it is advisable to analyze above the coordinate 1.1030.
- Selling positions can be considered in the case of a clear fixation of the price lower than 1.1000 (not a puncture shadow), with the prospect of a move to 1.0950 --- 1.0930. I would also advise taking a closer look at yesterday's low of 1.0985 (-5p.) As a starting point for entry.
Indicator analysis
Analyzing a different sector of timeframes (TF), we see that indicators on the minute sections signal purchases, reflecting the current rollback. Meanwhile, intraday and medium-term temporary areas are set to further decline. In the case of forcing an information background, indicators at minute and hour intervals can randomly change, take this into account in the analysis.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.
(September 12 was built taking into account the time of publication of the article)
The volatility of the current time is 12 points, which, of course, is a low indicator, but not yet an evening. It is likely to assume that due to the upcoming ECB meeting and the general information volatility of the day may be high.
Key levels
Resistance zones: 1,1100 **; 1,1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support Areas: 1,1000 ***; 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
