Over the past trading day, the currency pair pound / dollar showed volatility just above the average daily 91 points. As a result, the quote managed to grow a little more. From the point of view of technical analysis, we see that the inertial move has managed to push the British currency a little more, thereby warming up even longer positions. Considering the graph in general terms, we see that speculative interest did not give rest and the quotation returned to the frame of the previously completed flat education 1.2670 / 1.2750. What we have is the overheating of long positions. This is more of a fact than a theory, and now, traders carefully analyze the possible stagnation and quotes behavior for placing trading orders.
The information and news background of the past day had statistics on retail sales in the United Kingdom, where they saw a significant decline from 5.1% to 2.3%. The British currency did not immediately react to the statistics, but a little later it went into drain, although, probably, the players were still not completely cold from speculative growth against the background of the FOMC meeting. Then we had a meeting of the Bank of England with a subsequent press release, where we did not hear anything new. The regulator directly depends on the decision on Brexit, thus, until it takes place, there will be silence with the absence of any actions. Finally, as always, news from the Old World, where he passed another round for the post of head of the British conservatives and the prime minister of the country. As always, Boris Johnson won. This time he heaved 157 votes from members of the House of Commons, which is more than 14 in the previous round. There are two candidates left - the former head of the British Foreign Ministry and the current head of the Foreign Ministry. Now, there is a general party vote, of which the leader of the Tories and the prime minister of the country will be chosen. The announcement of the winner should take place on July 22.
Today, in terms of the economic calendar, we have data on PMI in the United States, where, in principle, no changes are expected. At the same time, there are data on sales in the secondary housing market for May. But even there, the change is not significant: Prev. 5.19M ---> Prog. 5.29M. Probably, the dollar against the general background of oversold may simply grow.
The upcoming trading week in terms of the economic calendar is less saturated with statistics in comparison with the past week. The most interesting events displayed below --->
Tuesday, June 18
United States 14:00 UTC+00 - Sales of new housing (May): Prev. 673K ---> 680K forecast
Wednesday, June 19
United States 12:30 UTC+00 - Basic orders for durable goods (m / m) (May): Prev. 0.0% ---> Forecast 0.2%
Thursday, June 20
United States 12:30 UTC+00 - GDP (q / q) (Q1): Prev. 3.1%
United States 14:00 UTC+00 - Index of pending sales in the real estate market: Prev. -2.0% ---> Forecast -2.6%
Friday, June 21
United Kingdom 8:30 Universal time. - GDP (y / y) (Q1): Prev. 1.8% ---> Forecast 1.3%
United States 12:30 UTC+00 - Basic price index for personal consumption expenditure (y / y) (May): Prev. 1.6%
These are preliminary and subject to change.
Further development
Analyzing the current trading chart, we see a characteristic slowdown in the range of 1.2670 / 1.2725. It is likely to assume that overheating of long positions is already close and the current stagnation signals this to us. Traders, in turn, produce the final fixation of previously held long positions and wait for clear price fixations lower than 1.2670 for laying short positions.
Based on the available information, it is possible to decompose a number of variations, let's consider them:
- Positions for purchase, as previously discussed, were conducted from Wednesday after the announcement of the FOMC maneuvers. Profit-taking is either already done or will happen in the near future. It's risky to enter the buy position now, and there is a significant overheating.
- Sell positions are considered in the case of price fixing lower than 1.2670.
Indicator Analysis
Analyzing a different sector of timeframes (TF), we see that indicators in the short term changed their interest to descending due to stagnation. Intraday and mid-term prospects are focused on an earlier upward course.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(June 21 was based on the time of publication of the article)
The current time volatility is 42 points. It is likely to assume that in the case of the recovery process, the volatility may still increase towards the daily average.
Key levels
Zones of resistance: 1.2770 **; 1.2880 (1.2865-1.2880) *; 1.2920 * 1.3000 **; 1.3180 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700.
Support areas: 1.2620; 1.2500; 1.2350 **.
* Periodic level
** Range Level