For the last trading day, the currency pair pound / dollar showed a high volatility of 130 points, as a result of having a downward impulse movement. From the point of view of technical analysis, we see that the one-day respite in volatility gave way to another surge, which was to be expected. What we have is testing the level of the cluster of 1.3200 (20), where the quotation felt resistance and rolled us back to the level of 1.3060. On the other hand, the information and news background yesterday was busy with understanding the earlier statement by the Head of the European Commission, Jean-Claude Juncker, who noted that April 12 is the deadline for approval of the exit agreement by the House of Commons. If this does not happen by this time, then there will be no more short delay. In fact, this is one of the reasons for yesterday's decline in the pound. Since the news flow was empty, there were no statements from high-ranking officials either.
Today, the day began with a new drop of Brexit, President of the European Council Donald Tusk considers it possible to offer Britain a "flexible" 12-month delay in leaving the European Union. The idea of Tusk will be the subject of discussion at an emergency summit of EU leaders on April 10. It should be understood that the words of Tusk were built in such a way that it is not clear whether Britain is obliged to accept the existing agreement before April 12. At the same time, it is also worth considering that a weightier voice in the person of European Commission Head Jean-Claude Juncker, has already stated that there will not be a delay if the agreement is not accepted. Thus, draw your own conclusions.
In terms of the economic calendar, we have important statistics from the United States regarding Non Farm Payrolls data, where significant growth is expected from 20K to 180K. On this news, speculators are already predicting a dollar strengthening, which is what we expect.
The upcoming trading week expects to be intense both in terms of statistics and on the information background, where the fate of long-playing Brexit will be decided. Displayed below are the most relevant events of the week.
Monday
United States 17:00 MSK - Volume of industrial orders (m / m) (Feb): Prev. 0.1% ---> Forecast -0.5%
Tuesday
United States 17:00 MSK - Number of vacancies in the labor market JOLTS (Feb): Prev. 7.581M ---> Forecast 7.540M
Wednesday
United Kingdom 11:30 Moscow time. - GDP (y / y): Prev. 1.4%
United Kingdom 11:30 Moscow time. - Production volume in the manufacturing industry (g / g) (Feb)
United States 15:30 MSK - Consumer Price Index (CPI) (y / y) (Mar): Prev. 1.5% ---> Forecast 1.8%
United States 21:00 MSK - Publication of FOMC protocols
Meeting of the European Council, where there will be a discussion regarding Brekzit.
Thursday
United States 15:30 MSK - Producer Price Index (PPI) (y / y) (Mar): Prev. 1.9%
Friday
Brexit Key Day
These are preliminary and subject to change.
Further development
Analyzing the current trading chart, we see that after the impulse move, the quotation felt a temporary support in the region of 1.3060, where we saw a pullback against the background of overheating. It is likely to assume that the quotation on the general information and news background will try to turn around, where traders are looking for fixation below 1.3060 with the prospect of a move to 1.3000.
Based on the available data, it is possible to decompose a number of variations. Let's consider them:
- Purchase items are not currently being considered. Possible consideration will occur in the case of a slowdown in the region of 1.3000.
- Positions for sale, as written in the previous review, traders considered a point to enter 1.3150. This is a breakdown of the existing stagnation. Now, we already have a position, and the prospect remains in the direction of 1.3000. If we do not have deals, we will wait for a fixation lower than 1.3060.
Indicator Analysis
Analyzing a different sector of timeframes (TF), we see that there was an upward interest against the background of a rollback in the short term. Meanwhile, intraday and mid-term perspective shows a downward interest against the general background of the market.
Weekly volatility / Measurement of volatility: Month; Quarter; Year
Measurement of volatility reflects the average daily fluctuation, with the calculation for the Month / Quarter / Year.
(April 5 was based on the time of publication of the article)
The current time volatility is 53 points. It is likely to assume that against the background of Non Farm, and the general information background, volatility will remain at a high level.
Key levels
Zones of resistance: 1.3220 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700
Support areas: 1.3000 ** (1.3000 / 1.3050); 1.2920 *; 1.2770 (1.2720 / 1.2770) **; 1.2620; 1.2500 *; 1.2350 **.
* Periodic level
** Range Level
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