Last week's upward movement made it possible for the pair to go beyond the average weekly move. This indicates an increase in the probability of the formation of a correctional model. The probability of a return to the level of 1.2791 is 90%, so purchases from current levels are not profitable. It is worth noting that this month the pair is already trading outside the monthly average move. This suggests that the Bank of England is interested in the growth of the national currency.
Work in the upward direction is a priority, therefore, any trades against the trend should have a clearly limited range and quickly translate into breakeven. Trades in the direction of a correction are possible, since the pair is trading outside the monthly control zone.
An alternative model will be developed if growth does not stop and none of the minor control zones is broken. In this case, a significant monthly extremum test will be required. The nearest high was formed in May of this year and is at the level of 1.3169.
Daily CZ - daily control zone. The area formed by important data from the futures market, which change several times a year.
Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.
Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.
The material has been provided by InstaForex Company - www.instaforex.com