Today, the February option contract will expire, implying an increase in volatility in the American session. This fact may accelerate the implementation of the descending priority model. Yesterday, there was a consolidation below the weekly CZ of 0.6798-0.6784. The next downward target is 1/2 CZ of 0.6714-0.6707. Reaching this zone will allow fixing the rests of sales. This must be done due to the fact that the pair has gone beyond the weekly average move.
A Downward movement at this stage is an impulse, hence, any growth must be perceived as a correction. This will allow you to find better prices for repeat sales of the tool.
An alternative model will be developed if the pair starts to grow from current levels. The main resistance will be at 1/2 CZ of 0.6806 - 0.6799. As long as the pair is trading below this zone, the probability of updating the local minima will be more than 70%. Achieving this zone will provide the most favorable prices for the sale of the instrument. Breakdown and consolidation above the level of 0.6806 will complete the downward impulse and indicate a change of priority.
Daily CZ - daily control zone. The area formed by important data from the futures market that change several times a year.
Weekly CZ - weekly control zone. The area formed by marks from important futures market which change several times a year.
Monthly CZ - monthly control zone. The area is a reflection of the average volatility over the past year.
The material has been provided by InstaForex Company -
www.instaforex.com