For the last trading day, the currency pair Pound / Dollar showed an extremely high volatility of 194 points having a result of 100% fulfillment of the previously set forecast. From the point of view of technical analysis, we see a pulsed upward movement, which we have been waiting for since last week, while talking about the accumulation around 1.3020 / 1.3100. What did traders get? - an entry into a long position in the region of 1.3115 and a breakdown of the cluster. After that, it moved to the predicted value of 1.3200, which reflects the local maximum of January 25, 2019. . What was the reason for this kind of bumpiness? - of course, with an informational and news background regarding Brexit. Yesterday, Theresa May made a speech, where she informed the deputies of the House of Commons about the results of recent negotiations with the European Union. But this is not the most interesting thing, speculators were waiting for one thing - the words about the possible postponement. "If the House of Commons refused to approve the agreement with the EU, and then refuse to approve the withdrawal from the EU without a deal on March 29, then on March 14, the government will ask the members of the parliament to vote for delaying Brexit in the framework of the 50th article of the Treaty of Lisbon. And if the chamber votes for the postponement, it will be necessary to bring the relevant legislative framework under it." Theresa May stated.
As expected, this news played well for a speculative increase. Thus, the pair flew right up to the level of 1.3286.
Today, in terms of the economic calendar, we have data on the volume of approved mortgage loans in Britain, which is reduced from 38.8K to 38.5K. In the afternoon,we will wait for data on industrial orders (m / m, Dec.) In the United States, where a growth of 1.5% is expected, also comes out. Data on pending sales in the real estate market will also be released (m / m, Dec.), similarly to growth of 0.8%.
Analyzing the current trading chart, we see that the quote did not only reached a local maximum of 1.3200, but also overcame it due to emotions, closely approaching the strong resistance level of 1.3300. Even without any assumptions, overheating is clearly defined and the probability of rollback is very high. Thus, the first point of rollback is the recently passed value of 1.3200, where in case of fixation below, which is very possible, we will go down to 1.3180 - the long-term Fibo. There is another development option that traders are considering which is the stagnation of the levels 1.3200 / 1.3280, however, we need some information and news support, which is not yet available.
Based on the available data, it is possible to expand a number of variations. Let's consider them:
- The purchase positions are 100% complete, but now, we do not have deals. Possible positions are considered in two versions: the first after a rollback, where we are looking for an entry point; the second, in case of loss of the downward mood and stagnation at the current coordinates, the purchase order is detected above the level of 1.3300.
- Positions for sale - traders consider selling at the current values. A more conservative entry is lower than 1.3200.
Analyzing a different sector of time frames (TF), we see that there was a downward interest against the background of a rollback in the short term. Meanwhile, intraday and medium term focus on an earlier impulse.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, with the calculation for the Month / Quarter / Year.
(February 27 was based on the time of publication of the article)
The current time volatility is 29 points. It is likely to assume that the volatility will be within the daily average, as the rollback phase is following the recent impulse.
Zones of resistance: 1.3300; 1.3440 **; 1.3580 *; 1.3700
Support areas: 1,3200 *; 1.3000 ** (1.3000 / 1.3050); 1.2920 *; 1.2770 (1.2720 / 1.2770) **; 1.2620; 1.2500 *; 1.2350 **.
* Periodic level
** Range LevelThe material has been provided by InstaForex Company - www.instaforex.com