Friday's macroeconomic reporting continued to delight sellers, so after weak data on inflation and GDP, retail sales came out, which, instead of rising to 2.6%, showed a spectacular dive into the 0.9% zone, and previous data was revised from 1.0 % to 0.8%. The pound quickly fell due to such indicators, showing increased volatility, which was lacking in recent days. In turn, support for the US dollar was provided by data from the United States, where the volume of construction of new houses for December showed some unrealistic indicators of 16.9%, compared with 2.6% a year earlier.
Today, in terms of macroeconomic reporting, we do not have statistics worth paying attention to, nor is today a day off in the United States where Martin Luther King Day is celebrated. Thus, the trading volume can be reduced, it is worth considering this in the trade.
In terms of technical analysis, we see an impulsive downward movement with an amplitude of more than 110 points, where the quotation quickly fell to the area of the psychological level of 1.3000. In fact, we again find ourselves at the fulcrum, with which it all began a week earlier. This market step makes it clear to us that the downward interest set in the first days of January is still preserved, and the level of 1.3000 is just one of the points of temporary rearrangements.
Considering the trading chart in general terms, we see that the peculiar spring at the peak of the five-month course has strongly compressed, which may signal an upcoming acceleration of volatility. We should not forget that the global trend is still downward.
It is likely to assume that sellers will try to take advantage of the situation in terms of the breakout of the control psychological level of 1.3000, but as history has shown, this level has quite large fluctuation limits, so you should not make hasty actions. The most notable values are on the history, in the area of 1.2955-1.2950, it is worth paying attention to them.
Concretizing all of the above into trading signals:
- Long positions, we consider in case of price consolidation higher than 1.3001.
- Short positions, we consider in case of price consolidation lower than 1.2955-1.2950.
From the point of view of a comprehensive indicator analysis, we see that due to the recent impulsive move, as well as the return of the price to the psychological level of 1.3000, the indicators have unanimously turned in a downward direction.
