Trading recommendations for the GBPUSD currency pair – placement of trade orders (September 12)

Trading 12 sept 2019 Donner votre avis

The pound/dollar currency pair shows low volatility of 57-70 points for the second day in a row, having driven itself into a relatively narrow accumulation. From technical analysis, we see that the quote continues to develop along with the range level of 1.2350, forming a distinct accumulation of 1.2310/1.2380 in the market. In this case, the behavior of quotes is justified, after an almost week-long rally, where market participants are in some kind of stunning state, trying to realize everything that is happening.

As discussed in the previous review, traders rolled so well on impulse candles in the first week of September that they took a wait-and-see position. Traders can understand what is the point of jumping in a narrowly developing range if you can work on its breakdown and go into the main course of the market. Looking at the trading chart in general terms (daily period), we see that the corrective move is still maintained in the market, where a slowdown of remarkable candles is formed on its top. It is really difficult to say whether this slowdown will play in terms of restoring the initial trend since from technical analysis, this should happen, but in terms of the information flow, the angle may be different.

The news background of the last day had data on producer prices in the United States, were they initially predicted growth, but then the data was revised and on the day of publication indicated that producer prices remained at 1.7%. The data are published with an acceleration of 1.7% – 1.8%, where the US dollar received local growth. What has changed in the general picture of GBPUSD is not at all, the movement in the lateral range has been preserved, and the ambiguous information background is to blame. So the Scottish court ruled that Boris Johnson's decision to suspend parliament was illegal. The court decision described the Prime Minister's actions as a "glaring case" where the generally accepted standards of conduct of public authorities were not met. The final decision will be made by the Supreme Court of Great Britain, the government itself intends to appeal the decision to the Supreme Court, and Boris Johnson believes that parliament should not return to work until this court makes a decision. However, a group of opposition lawmakers gathered in front of the Palace of Westminster, calling for parliament to reconvene.

Honestly, Santa Barbara is live, and that's not the end of it. It turns out that the Prime Minister has long concealed documents confirming the significant threat of leaving the EU without an agreement, said the "shadow minister" on issues of leaving the EU, Keir Starmer.

"These documents confirm the significant threats of leaving the EU without an agreement, which the Laborites are desperately trying to prevent. It is completely irresponsible on the part of the government to try to ignore these warnings and hide facts from society. Boris Johnson is obliged to admit that he behaved in bad faith towards the British people," Keir Starmer said in a statement.

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Today, the focus of the economic calendar is the ECB meeting, where its head Mario Draghi will outline plans for further action. The news, of course, is not in Britain, but in the event of a correlation between the EURUSD & GBPUSD currency pairs, synchronous movement may occur. In terms of statistical indicators, we are waiting for the publication of inflation data in the United States, where, it seems, the acceleration from 1.6% to 1.8% should be confirmed.

Further development

Analyzing the current trading chart, we see a sluggish movement horizontally, all with the same boundaries as were previously 1.2310/1.2380. Relative to the current points, accumulation is carried out near the lower border of the corridor. In turn, traders continue to stay out of the market, waiting for clear passages outside the existing boundaries. It is necessary to understand that there is no hurry, the information background puts so much pressure on market participants that the uncertainty in actions is felt more than ever.

It is likely to assume that the fluctuation within 1.2310/1.2380 (+/- 15 points) will remain in the market for some time. In this case, I advise you to make a stronger emphasis on the analysis of the information background and third – party factors, since from technical analysis, we have only one signal – to sell.

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Based on the above information, we will derive trading recommendations:

  • Buy positions are considered in the case of a clear fixation of the price higher than 1.2380 (+5p.), with the prospect of a move to 1.2450-1.2500.
  • We consider selling positions in case of price-fixing lower than 1.2300 (-5p.), with the prospect of a move to 1.2250-1.2150.

As you can see, the recommendations remain the same, thus we are looking for a basis that will help to implement the given plans.

Technical analysis

Analyzing different sector timeframes (TF), we see that the indicators in the short-term and intraday period signal sales, but the indicators are variable due to the accumulation. The medium-term outlook retains an upward interest due to the impulse jumps of the past week.

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

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

(September 12 was built taking into account the time of publication of the article)

The volatility of the current time is 27 points, which is an extremely low value for this period. Slowing and falling volatility gives us a leading signal of a possible jump, the market is preparing, and we also need to be ready to enter the market.

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Key level

Resistance zones: 1.2350**; 1.2430; 1.2500; 1.2620; 1.2770**; 1.2880 (1.2865-1.2880)**.

Support zones: 1.2150**; 1.2000***; 1.1700; 1.1475**.

* Periodic level

** Range level

*** The article is based on the principle of conducting transactions, with daily adjustments.

The material has been provided by InstaForex Company - www.instaforex.com

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