From the point of view of complex analysis, we see a variable amplitude fluctuation, which restrains the quote from significant changes, and now let’s talk about the details. One amplitude was replaced by another, this is how the time interval from April 16 to the current day can be described. At first, we variably wagged within 1.0850 / 1.0885, now the focus is on the lows of April 16 and 17, where the quote systematically finds a foothold, slowing down and forming a rebound. In fact, this is another range where the scope of the fluctuation is much wider, but it is worth noting that with all this, the downward mood is clearly felt in the market.
Regarding the theory of further development, the compression model is still relevant, where, with an amplitude, a signal to complete the model arises. In this discussion, we are talking about a model of sequential inertia [10.03.20-17.04.20], where in the construction of the last steps a flat formation arose that reflects the finish of the entire compression model.
The completion of the model will be expressed as a burst of activity, where the extreme step breaks through.
In the downward direction, the nearest step is in the region of the level of 1.0775, and the level of development of the model reflects the region of 1.0636.
In the upward plan, the closest step is in the region of the level of 1.1000, and the level of development of the model reflects the region of 1.1180.
Considering the past minute trading day, you can see a lot of impulse candles both during the Asian and American trading sessions, due to the saturated external background. The local minimum of the day was 1.0816, after which there was a rebound, during which a maximum of 1.0880 was formed.
In terms of volatility, activity typical for the euro is again recorded, which reflects a framework of 55–70 points. Naturally, for the current time this is a slowdown signal, but for the past year this was the norm. It is worth considering that upon completion of the compression model, volatility can increase significantly, but in a local nature.
Details of volatility: Monday – 155 points; Tuesday – 183 points; Wednesday – 115 points; Thursday – 278 points; Friday – 166 points; Monday – 151 points; Tuesday – 234 points; Wednesday – 243 points; Thursday – 326 points; Friday – 194 points; Monday – 191 points; Tuesday – 160 points; Wednesday – 133 points; Thursday – 188 points; Friday – 194 points; Monday – 134 points; Tuesday – 127 points; Wednesday – 136 points; Thursday – 147 points; Friday – 91 points; Monday – 67 points; Tuesday – 142 points; Wednesday – 72 points; Thursday – 110 points; Friday – 33 points; Monday – 74 points; Tuesday – 84 points; Wednesday – 134 points; Thursday – 95 points; Friday – 80 pips; Monday – 55 points; Tuesday – 64 points. Daily average
As discussed in the previous review, the main positions are aimed at declining, but if the price is consolidated lower than 1.0810, a local rebound may occur, which in fact already happened.
Tuesday’s recommendation for alternative positions coincided by 100%, with an increase in the trading deposit.
[We consider buying positions as an alternative transaction, in case of price consolidating higher than 1.0860, with a local perspective of 1.0880.]
Considering the trading chart in general terms, it is clear that the compression model in the daily period is coming to an end, and if we look at price trends, it will be seen that development in a downward plan has more chances than with an upward development.
The news background of the past day contained data on sales in the secondary housing market in the United States for March, where they recorded a decline of -8.50% with a forecast of -8.10%.
In terms of the general informational background, we see that the epidemiological situation and the spread of COVID-19 in Europe has improved. Theoretically, the peak incidence rate has been passed, and this is confirmed by a systematic decrease in the number of detected cases of infection in Italy, Germany, France, Spain.
The peak has been passed, and the consequences of the pandemic are ahead of us, and so, the head of the European Commission, Ursula von der Leyen, said that the EU will need about 1 trillion euros to deal with the consequences. But it is still unknown where to get that kind of money. Thus, there are speculations that the EU has taken the sale of “perpetual bonds”, but this will be raised at the upcoming European Council summit on April 23.
In turn, the board member of the European Central Bank Fabio Panetta is trying to convey to everyone the idea that the fiscal reaction of the eurozone to the crisis is inadequate and threatens the single market.
“Budgetary measures should be proportionate to the scale of the shock, should not aggravate the fragmentation caused by differences in the initial budget positions, and should not distort the playing field within the framework of a single European market. The financial response of European countries so far has not been consistent with these principles.” Fabio Panetta said.
Today, in terms of the economic calendar, we do not have statistics for Europe and the United States.
Further development
Analyzing the current trading chart, we see a variable chatter within a wide range of 1.0815/1.0885. In fact, this is still a compression process, the structure of which is similar to a flat. It is not clear how long this will drag on, but we are already in this process for more than 80 hours, which is considered an impressive scale. Thus, the work is performed in accordance with the breach of the compression model, as well as on local operations in the structure of a variable range.
By analyzing the time interval per minute, it can be noticed that the concentration at the mirror level of 1.0850 has arrived again, having an amplitude of slightly less than 30 points.
In terms of the emotional component of the market, it is worth paying attention to daily jumps of activity that reflect speculative interest.
It can be assumed that price fluctuations within the main range of 1.0815/1.0885 will still remain in the market, where it is possible to work both on its breakdown, operating with the main positions regarding the completion of the compression model, and on local deals within variable frames.
Based on the above information, we derive trading recommendations:
– We consider selling positions lower than 1.0810, with the prospect of a movement to 1.0775, which will relate to the main positions. We consider local deals in terms of movement from 1.0840 to 1.0815.
– We consider buying positions higher than 1.0900, with the prospect of a movement of 1.0930 – 1.0980.
Indicator analysis
Analyzing a different sector of time frames (TF), we see that the indicators of technical instruments unanimously signal a sale, due to an earlier downward spiral.
Volatility per week / Measurement of volatility: Month; Quarter; Year
Volatility measurement reflects the average daily fluctuation calculated for the Month / Quarter / Year.
(April 22 was built taking into account the time of publication of the article)
The volatility of the current time is 29 points, which is 68% lower than the daily average. It can be assumed that one should not expect sharp activity when following the price within the established boundaries. Acceleration will occur when the compression model is completed.
Key levels
Resistance zones: 1.0850 **; 1.1000 ***; 1.1080 **; 1.1180; 1.1300; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support Areas: 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.
* Periodic level
** Range Level
*** Psychological level
The material has been provided by InstaForex Company – www.instaforex.com
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