From the point of view of complex analysis, we can see that the quotes consolidated above the range level.
The past trading day was as if decisive in terms of long positions, since the day before, the quote literally stood still with an oscillation amplitude of 1.1100 / 1.1150. The shift arose during the European session, in which market participants, in just one hourly candle, crossed the variable border of 1.1150 and drove the quotes to the range of1.1180 / 1.1200. The movement seemed to signal the continuation of the current mood, which has already transpired in about 2.5 weeks. Of course, not all of the outcomes were satisfactory, as a slowdown occurred at the range level, splitting the trading positions into smaller shares or closing them.
If we analyze the recovery relative to the movement on March 9 to March 20, we can see that the output was 68%, which is quite impressive for being able to maintain the mood. Such jump formulated many theories, particularly on a possible upward trend, but we should remember to be careful in making any conclusions.
Anyhow, the movement from March 9 to March 30 is actually part of the downward trend, which has been going on since August 2008. The economy of the European Union just simply can not pull this burden, so a change in tact into upwards is quite unlikely.
The upward movement which is currently being observed is built on speculative mood, and the duration and scale of it is not clear. However, as soon as trading closes, an equally rapid downward move is possible, which will continue along the global downward trend.
In terms of volatility, acceleration relative to Monday is 53 —> 80 points, where the current dynamics reflects healthy market activity. In the general analysis of volatility since March of this year, one can distinguish steadily high activity on the part of speculators, which violated the general principles of dynamics for the EUR / USD pair.
In another note, the news published yesterday did not contain important statistics for the US and the EU, so all attention was focused on external news.
The most significant occasion was the mass protests and ongoing riots in the streets of the United States, which has wandered in the scale of “emergency.” Curfews were imposed in many cities to restore order, but clashes between civilians and law enforcers continue, escalating The deterioration of the situation. Arrests have exceeded ten thousand, and the number of deaths of protesters has reached 11 (but the actual number may be higher). Donald Trump is doing all methods to suppress the protesters, but so far he is without success. Investors are now concerned with the scale of the protests, since there has not yet been so much unrest in the US this large. The dollar, in turn, weakened and lost its position against other currencies.
Data on business activity in the European services sector was published today, revealing a huge increase in the index from 12.0 points to 30.5 points. Unemployment indicators in the EU also came out, the level of which rose from 7.1% to 7.3%, lower than the forecasted 8.1%.
However, despite the positive statistics, the dynamics of the market remained unchanged.
In the afternoon, the ADP will publish its report on US employment, where the figure could decline by another 9.6 million, which everyone already expects due to the weekly figures of applications for unemployment benefits. Data on business activity in the US services sector will also come out, which is expected to grow from 26.7 to 36.4.
Analyzing the current trading chart, we can see a consolidation above the range 1.1180 / 1.1200, where the quotes slightly decreased activity, even though it still hasn’t passed the level 1.1240, which theoretically could give a chance to accelerate long positions. A lot depends now on external news, the state of unrest in the US in particular, as the said situation is the cause of speculative mood in the market.
If the quotes disregard the current discourse in the US and proceed to consolidate above 1.1240, the upward trend will continue, in the direction of 1.1300. But if demand drops due to the negative news, a correction will occur, and the quotes will return within the range of 1.1150 / 1.1180. A more significant downward movement will depend on the perseverance of speculators to short positions.
Thus, based on the above information, we present these trading recommendations:
– Open sell positions lower than 1.1190, in the direction of 1.1150.
– Open buy positions higher than 1.1240, towards 1.1300.
Analyzing the different sectors of time frames (TF), we can see that the indicators of technical instruments unanimously signal a bullish mood, due to the rapid upward movement and the breakdown of key levels.
Volatility per week / Measurement of volatility: Month; Quarter Year
The measurement of volatility reflects the average daily fluctuation calculated by Month / Quarter / Year.
(June 3 was built, taking into account the time of publication of the article)
The volatility of the current time is 61 points, which is already more than half the average value. Speculative mood and external news are expected to continue pumping activity into the market.
Resistance zones: 1,1000 ***; 1.1080 **; 1,1180; 1.1300; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100
Support areas: 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1,0500 ***; 1.0350 **; 1,0000 ***.
* Periodic level
** Range Level
*** Psychological level