By the end of the last trading week the euro / dollar currency pair showed a high volatility of 61 points, resulting in a corrective move on the market. From the point of view of technical analysis, we see that the rapid decline, which lasted already throughout the week, reached the mark of 1.1112, where a periodic pivot was found and the long-awaited correction was born. The news and news background had statistics about the US GDP for the first quarter, where they waited for a decline from 2.2% to 2.0%, but as a result, get accelerated to 3.2%. The news is certainly positive for the US currency, but, as we see from the result, the dollar was losing its position. The question is why. Probably, there are two factors, the first is a strong overheating of short positions, caused by such a rapid and steady decline, where the technical correction resulted. The second factor is the upcoming two-day Fed meeting, where they can again catch up on the negative.
Today, in terms of the economic calendar, we do not have solid statistics, the only thing present, is the speech of the Bank of England CEO Mark Carney. However, there is an indirect factor for the euro. But if there are no sharp statements, then we will see nothing.
Further development
Analyzing the current trading chart, we see that the quote is still in the correction phase, but already quite close to the important mirror level of 1.1180. Probably assume that at current values, the upper limit will be just this level 1.1180. In the case of fixation higher than 1.1180, we can assume further correction formation towards 1.1230. Otherwise, a temporary flat of 1.1120 / 1.1180 is possible.
Based on the available data, it is possible to decompose a number of variations, let's consider them:
- Consider buying positions in case of a clear price fixing higher than 1.1180.
- Positions for sale are considered in case of a clear price fixing lower than 1.1110.
Indicator Analysis
Analyzing a different sector of timeframes (TF ), we see that in the short term there is a downward interest against the background of a temporary stop. Intraday perspective is in the ascending phase against the background of the correction. The medium-term perspective maintains a downward interest on the general background of the market.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.
(April 29 was based on the time of publication of the article)
The current time volatility is 22 points. If the quotation finds resistance around the level of 1.1180, the volatility will remain within the average daily indicator.
Key levels
Zones of resistance: 1.1180; 1,1300 **; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100
Support areas: 1.1080 *; 1.1000 ***; 1,0850 **
* Periodic level
** Range Level
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