07.11.201909:54 Forex Analysis & Reviews: Trading recommendations for the GBPUSD currency pair - placement of trade orders (November 7)

The pound / dollar currency pair, without any emotions and volatility, forms a progressive downward move, which unconditionally tires the market participants. Will the meeting of the Bank of England be able to revive the market sentiment? - we will analyze this issue in our article

From the point of view of technical analysis [TA], we see that the stagnation along the level of 1.2885, which tormented us for almost two days, nevertheless fell and the quote managed to resume the downward move. Do not be too happy, because in terms of volatility and mood of market participants, everything is bad. Thus, as early as nine trading days, we have a very sluggish volatility [indicators 58 -> 65 -> 97 -> 62 -> 75 -> 45 -> 67 -> 58 -> 53 points] that you can fall asleep. In fact, this is quite a rare occurrence when in such active currency pairs as, for example, GBP/USD, there are such local stops that are similar in dynamics to the currency pairs of the second division. The reason for everything is the overhanging ambiguity that comes to us from the information background. At the same time, we still have overbought English currency, which during the phase of unjustified excitement managed to climb to a height of 800 points during the period of October 10-21. As a result, we obtained a range between the two control levels of 1.2770 / 1.3000, where the quotation still fluctuates.

Analyzing past hourly hour, we saw an indecently weak activity, right up to the start of the American trading session, where at least some, but still movement occurred. So, it looked like that. The quotation led the movement in a narrow range of 15-25 points, just parallel to the 50% level [1.2885], relative to the range of 1.2770 / 1.3000. During the American session, there is a local upsurge of 13:00-18:00 [UTC+00 time at the trading terminal], giving out a modest 45 points of the move.

As discussed in the previous review, traders continue to hold short positions even from the value of 1.2925, where the order of the goals looks like this: 1.2860-1.2800 --- 1.2770.

Considering the trading chart in general terms [the daily period], we see all the same movement at the specified levels of 1.2770 / 1.3000, where there is an almost even vertical move on the left, which alarms the market participants. In terms of trends, the alignment is as follows: The period of 12 years is a downward trend; The period of 1.5 years is also a downward trend, with the premise of a fracture; 2019 - V-shaped oscillation with almost 74% of the downward movement.

The news background of the past day does not have in itself the attention of statistics on Britain and the United States.

The informational background continues to hold public attention, giving portion-wise news on Brexit and the election race. Thus, let's go sequentially on the news feed, starting with the revelation of Boris Johnson, who said that he wanted to "chew on his tie" for a moment due to the forced delay of Brexit.

"I can tell you, I reached the point when I wanted to chew my own tie out of despair, since we had almost achieved everything. We have an agreement with which we can leave the EU in just a few weeks." the Prime Minister said during the election campaign.

In turn, the former Speaker of the House of Commons of the British Parliament, John Birkou, believes that the country's withdrawal from the European Union is the biggest mistake.

"An honest answer - I don't think it helps Britain. I believe that for many years I have been fair to Brexit supporters, giving them the right to ask an urgent question, and to start urgent debates, and to Brexit opponents. I chose the amendment to the throne speech on holding a referendum on EU membership, because it was a legitimate proposal and many parliamentarians signed in its favor. I was fair with everyone, I was impartial at my post. But I am no longer on duty and should not remain impartial. If they ask me if Brexit meets our interests, an honest answer will be no. I consider Brexit to be the biggest foreign policy mistake of the post-war period, "John Birkou expressed his thoughts.

Exchange Rates 07.11.2019 analysis

Today, the focus is on a meeting of the Bank of England followed by a press conference. So, an event, like a meeting of the regulator, is a priori important, there is only one but. The Central Bank is severely limited in any actions due to Brexit and the upcoming parliamentary elections, that is, with 100% probability that no one will touch the interest rate, and the rhetoric of the head of the Central Bank will probably be through the fingers. Here it is only worth considering one point that, in comparison with other central banks of the world that are seeking to reduce interest rates, the Bank of England personifies stability, keeping the interest at 0.75. Whether it will inspire investors, I'm not sure, as soon as Brexit passes, regardless of the outcome, the rate will be reduced very quickly. Thus, you can listen to Mark Carney, but he's unlikely to have time to take any actions,

12:00 Universal time. - Bank of England meeting

12:30 Universal time. - Speech by Mark Carney, Head of the Bank of England

Further development

Analyzing the current trading chart, we again see a very modest fluctuation, where, after a slight descent, stagnation occurred with a presumptive nascent rollback. So, the fluctuation in the given framework [1.2770 / 1.3000] has already gone below its midpoint 1.2885, where, in principle, there are not many left to the control point 1.2770, which many hope. In terms of emotional component and volatility, we have not just weakness, but a distinct decline. In this case, a clear recovery would have occurred in the event of a breakdown of one of the key levels of 1.2770 / 1.3000.

By detailing the per minute movement, we see that the downward interest was partially supported in the Pacific and Asian trading sessions, where stagnation came in the morning with a slight pullback. Volatility is still low.

In turn, speculators continue to work with short positions, which is the most profitable tactic. Already in the nearest path, transactions will be fixed in connection with the risk of another bounce from the range level of 1.2770 [1.2750 / (1.2770) / 1.2800].

It is possible to assume that if we maintain a downward mood, we will continue to descend to the range level range of 1.2770 [1.2750 / (1.2770) / 1.2800], where it is worthwhile to carefully monitor the behavior of quotes and price fixing points. In fact, we will encounter a moment where the analysis will be considered as a rebound / breakdown relative to the level and attractive trading operations will appear again, which will make it possible to earn.

Exchange Rates 07.11.2019 analysis

Based on the above information, we derive trading recommendations:

- Buy positions will be considered already in case of a rebound from the range level of 1.2770.

- Sales positions are held in the direction of the range level of 1.2770 [1.2750 / ( 1.2770 ) / 1.2800], where transactions are likely to be fixed. Re-entry into transactions will be considered after fixing the price below the range level.

Indicator analysis

Analyzing a different sector of timeframes (TF), we see that the indicators have taken a single position in terms of a downward movement relative to all the main time intervals. It is worth considering that the indicators in the short term are variable due to stagnation, but the medium term is in its infancy.

Exchange Rates 07.11.2019 analysis

Volatility per week / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(November 7 was built taking into account the time of publication of the article)

The volatility of the current time is 24 points, which is a very low indicator for this time section. It is likely to assume that in the event of another slow down within the 1.2770 level, volatility will remain at a low level. In the case of a breakdown of the range level, we can see the acceleration of volatility.

Exchange Rates 07.11.2019 analysis

Key levels

Resistance Zones: 1.3000; 1.3170 **; 1.3300 **.

Support areas: 1.2770 **; 1.2700 *; 1.2620; 1.2580 *; 1.2500 **; 1.2350 **; 1.2205 (+/- 10p.) *; 1.2150 **; 1,2000 ***; 1.1700; 1.1475 **.

* Periodic level

** Range Level

*** The article is built on the principle of conducting a transaction, with daily adjustment

*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.

Gven Podolsky,
Analitickog eksperta
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