IFC Markets Analytics

[IFCM]

Japanese yen choosing way
Today we consider the USD/JPY currency pair on the D1 chart. The price made a reversal, touching the strong W1 resistance line. The daily uptrend channel is breached in the direction of the red zone, and now we have every reason to believe that a new bearish D1 trend is emerging. Parabolic confirms the trend direction and moves along the DonchianChannel lower boundary, verifying the price direction. The only alarming signal can be seen at the moment is the breach of RSI-Bars resistance line, which may be proved false. To confirm the bearish sentiment, you should wait for the oscillator level crossing at 31.0851%.
This event is expected to happen before the fractal support breach at 105.189. This mark is strengthened by DonchianChannel lower boundary and can be used for placing a pending sell order. Stop Loss can be placed at 107.725 or 109.971 (for conservative traders). It should be noted that the importance of the last fractal peak is confirmed by the Parabolic historical value, and also the bearish candlestick pattern “shooting star”, which is marked in yellow on the chart.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal peak. Updating is enough to be done every day after the formation of 5 new candlesticks, needed for the Bill Williams fractal formation. Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 105.189
Stop loss above 107.725

 

[IFCM]

Pending British pound

Today we consider the daily chart of GBP/USD currency pair. The price is going down within the daily and weekly downtrend channel. There was a breakout of the daily trend line, but we assume it to be false: at the moment the price went back to the trend line. The downtrend price movement is confirmed by the DonchianChannel bias. Let us consider the RSI-Bars oscillator chart: we can observe that the triangle was formed. That means the market is waiting for further action and has not decided yet on the direction. The triangle top side was breached, and that gives us a warning about a possible change in the current price trend. In order to get an additional confirmatory bearish signal, we may wait for the oscillator level breakout at 29.5458%. It will happen before Parabolic trend indicator gives us a signal by crossing the price level at 1.5869. This mark can be used for placing a pending sell order. It is reinforced with the DonchianChannel lower boundary, Parabolic historical values and Bill Williams fractal. Stop Loss is recommended to be placed at the high of 1.6233. Its significance is confirmed by the fractal and Parabolic values.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal peak. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.5869
Stop loss above 1.6233

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Australian dollar: possible bullish momentum

Today we consider the daily chart of AUD/USD currency pair. At the moment you can observe the price consolidation within the daily downtrend channel. There is no contradiction on the part of RSI-Bars oscillator: its upward movement gives us a reason to suppose a prompt trend reversal to the bullish one. The downtrend reversal is possible but not likely to happen, due to unforeseen fundamental factors, since the monthly downtrend is recorded. In case of a new bearish momentum, you should be aware of the oscillator level breakout at 30.2495%. For conservative traders it is recommended to wait for confirmatory bullish signals from such trend indicators as Parabolic and DonchianChannel, when the price crosses the level of 0.8915. This mark can be used for placing a pending buy order. It is strengthened by the upper boundary of DonchianChannel, Parabolic values and Bill Williams fractal. Stop Loss is better to be placed at 0.8619. This level is reinforced with the fractal and the lower border of DonchianChannel.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal trough. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 0.8915
Stop loss below 0.8619

 

[IFCM]

Euro return expectation

The main fundamental event for today is the German Ifo Business Climate release at 10:00 CET. The composite index is based on a survey conducted among manufacturers, construction companies, as well as wholesalers and retailers, calculated by German Institute for economic research Ifo. Each month a survey is run among 7000 business representatives regarding the favorable business climate and market expectations for the next six months. Note that the index is interconnected with the main macroeconomic indicators of the EU. Rapid reaction to changing business climate provides leading signals relative to possible changes of spending costs, investment funds and attracting manpower in Germany.
The index includes 2 indicators: assessment of the current economy state and evaluation of expectations. The second component has a greater importance for investors. The German economy remains the main driver for the European markets development: more than 20% of the EU GDP. This is the biggest rate among other European member states. For this reason, we expect the Ifo index to affect greatly the European currency rate.

Here we consider the EUR/USD currency pair on the H4 chart. The price broke the lower triangle side and was moving steadily into the red zone, until it was stopped by the primary daily trend. At the moment there is a H4 trend reversal influenced by bulls, as well as the Parabolic trend indicator: we are looking forward to the movement continuation. Note one of the most significant signals: the 30-day resistance breakout of the DonchianChannel and the trend line upward breakout of the RSI-Bars oscillator (marked in red ellipse). Thus, all the analysis methods indicate the most probable euro uptrend continuation. As an ultimate signal, we expect the fractal high breakout at 1.27169, which may be used for opening a pending buy order. Stop Loss is recommended to be placed below 1.26304. This support level is confirmed by the strong daily trend line, and also Parabolic historical values.
After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal low. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 1.27169
Stop loss below 1.26304

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Gold rush: final round

Markets are frozen in the situation of uncertainty: minutes of Federal Open Market Committee are expected to be announced today, which will define the near future of the monetary policy. The Fed is assumed to be ready to complete the QE program: the economy recovery is being maintained, the labor market is quite stable. However, it is possible that the measures may be temporarily put off, due to highly volatile financial markets. If the basic expectations would still be justified, we should expect the immediate US currency strengthening and the fallen prices on precious metals futures. The latter is more likely to happen also due to the recovery continuation in the US stock market, and investors tend to give up on defensive assets in favor of risky investment.

Here we consider the XAUUSD (Gold) futures on the H4 price chart. The retracement of the daily bearish trend has been over, and an unstable downtrend is being formed now. It is confirmed by the Donchian Channel (13). The situation is still uncertain: we can see the upward breakout of the H4 trend line, and the price has prepared to move sideways. Nevertheless, due to the general price direction of the market, there is a high probability of this breakout to be false, so the price would cross down the trend line. Thus, when crossing the fractal support level at $1221.42 per ounce, we expect the Parabolic reversal moving in the direction of the red zone. This mark can be used for placing a pending sell order. It is recommended to wait for the confirmatory RSI-Bars level breakout at 27.3536%, which was confirmed three times (!) by the oscillator signal. We expect it to happen at the same time or before the bearish price movement below 1221.42. Stop Loss is better to be placed at the strong fractal resistance level at 1233.88, which is confirmed by Parabolic historical values and the Donchian Channel top boundary.
After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1221.42
Stop loss above 1233.88

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Yen climbing

Here we consider the USD/JPYcurrency pair on the daily chart. The price is influenced by the daily uptrend, and after a slight retracement, we have all the more reason to believe in the bullish victory. The current price direction is confirmed by Parabolic historical values. There is no contradiction on the part of RSI-Bars oscillator: its values are moving upwards within the bullish trend. We can wait for an additional confirmatory signal from DonchianChannel after the breakout of the last fractal price level at 108.353. It will be preceded by the last high crossing at 58.5870% on the oscillator chart. It is recommended to use the level at 110.064 for placing a pending buy order. It is confirmed by the intersection with D1 and MN resistance lines and the Bill Williams fractal. When the price would cross the monthly resistance line, a strong bullish momentum is expected. Stop Loss is better to be placed at 105.163, which is strengthened by the intersection with the daily trend line, fractal and Parabolic historical values.

After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal low. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.\

Position Buy
Buy stop above 110.064
Stop loss below 105.163

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Oil or FOMC?

Yesterday the Federal Open Market Committee (FOMC) minutes revealed the statement confirming the QE3 completion in late October. This decision will result in a steady volume reduction of long-term government bonds purchases. Note that the US Q2 GDP rose 4.6% YoY. Besides, it is planned to keep interest rates at 0-0.25% per annum to maintain economic development with the help of available commercial loans. The main determinants of monetary policy remain to be unemployment and inflation rates. As it was pointed out in the statement, the base rate may be revised only in case the rate exceeds the threshold of 2%. The FOMC statement caused a significant dollar consolidation against the most liquid currencies.
Today we expect the quarterly US GDP release and Unemployment Claims. If the indicator values are at the expected level, we should wait for the general trend to be continued. A relatively modest reaction is observed only by the Canadian dollar. It is explained by the slow recovery in oil prices, which are now traded at $81 per barrel (WTI). Taking the oil component of Canadian exports into account, this fact provides confidence for investors regarding the Canadian currency. However, it is still too early to talk about a steady trend, so if the US figures are confirmed, we would expect the highs of the USDCAD to be updated.

Here we consider the given currency pair on the H4 chart. The price has formed a triangle, indicating a temporary weakening of the current trend and establishing a steady market state. At the moment we can see the trend line breakout in the direction of the green zone, which is accompanied by the Parabolic reversal. It should be emphasized that the price breakout is not confirmed by the RSI-Bars signal, and that means we would better wait for the resistance breach at 52.8089%, so that we would be confident in the growth continuation. As it is supposed, it will happen after the key price level crossing at 1.12589, which coincides with the Donchian Channel (13) high. This mark can be used for placing a pending buy order with Stop Loss to be placed below 1.11168. The given level is good for conservative trading, as it is strengthened by Parabolic historical values and DonchianChannel lower boundary.
After position opening, Trailing Stop is to be moved after the Parabolic values, near the next fractal low. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 1.12589
Stop loss below 1.11168

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

US dollar index - FOMC

Today we consider the currency index &VSUSD_Index, composed by the Personal Composite Instruments - PCI technology. The index is designed to show the US dollar price movement against other segment of the Forex market. Acting as a systematic indicator of the FX market, we use a portfolio of the most liquid currencies: EUR(12.7%)+JPY(14.5%)+GBP(17.5%)+CHF(19.1%)+AUD(18.1%)+CAD(18.1%). The price of each currency in the portfolio is expressed in USD. The weights are determined on the basis of the currency liquidity against the volume of international bank circulation. For more detailed information and advantages regarding the US dollar index click here.

Note that the index reaction to the fundamental events of the US economy is very obvious and stable: the index forms a stable trend channel, while it is less susceptible to the fundamental events of other currencies. Let us remind you that on Wednesday the Federal Open Market Committee (FOMC) issued the statement, confirming the QE3 completion in late October. This decision will result in a gradual volume reduction of the long-term government bonds purchases. However, the interest rates are planned to be kept at the level of 0-0.25% per annum in order to maintain the economic growth with the help of available commercial loans. The FOMC statement resulted in significant dollar consolidation against the most liquid currencies. This fact allows counting on the D1 bearish trend continuation of the &VSUSD_Index.

Here we consider the daily closing/opening price chart of the given instrument. It was composed in NetTradeX platform. We can see that the price broke the lower triangle side downwards. This is the first signal of the bearish trend continuation. At the same time we can see the downward intersection of the exponential moving average (13 days) and Parabolic reversal: all the major signals confirming the trend continuation. However, we should mention a stable momentum if the channel of the triangle is broken in the direction of the red zone, crossing the mark of 0.98540. In this case we expect the resistance level breakout of the RSI(13) oscillator at 35%. This price level can be used for placing a pending sell order. Stop Loss is recommended to be placed above the upper side of the triangle.

Position Sell
Sell stop below 0.98540
Stop loss above 1.00348

More information about the mechanism of portfolio operations is available on our website section “Quick Guide for Creating and Trading PCI”.

 

[IFCM]

Manufacturing PMI, UK

Today at 10:30 (CET) we expect the release of the monthly UK Manufacturing PMI. The diffusional index is formed as a result of a monthly survey of 600 purchasing managers in the manufacturing sector, which give their opinion regarding employment, prices, suppliers and inventory facilities. If the index falls below 50 due to the reduced activity, that indicates the economic downturn, especially if the trend is maintained for several months. This is the leading indicator as purchasing managers get a quick access to the company’s statistics. This is exactly the reason players have a strong reaction to the PMI index release. Today we can expect a new volatility momentum of the British pound.

Here we consider the GBP/USD currency pair on the H4 chart. The price formed a graphic pattern called “double top”, which reflects the bearish market sentiment. ParabolicSAR reversed in the direction of the red zone after the breakout of the closest fractal low. At the moment, its historical values are moving along the H4 trend line. The DonchianChannel(13) confirmation will be received after the support level crossing at 1.58607. This mark can be used for placing a pending sell order. At this point, be sure to pay attention to the RSI-Bars oscillator reaction: now it is still indicating a bullish divergence. It will be possible to talk about a stable trend continuation after the breakout of the oscillator support at 34.5540%. That will point out the divergence was being false. The graphic pattern “double bottom” can be used for placing Stop Loss at 1.61908. This level is also strengthened by Parabolic historical values and the upper side of DonchianChannel.

After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal peak. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.58607
Stop loss above 1.61908

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Trade Balance

Today at 14:30 (CET) we expect the release of the American and Canadian Trade Balance. This indicator is the volume ratio of exports and imports. If the difference in volume is positive, then the trade balance is positive (surplus). A surplus (or a reduction in deficit) is a favourable factor for the national currency appreciation, and it has a significant impact on the market. A simultaneous data release by two trading partners suggests a consistent interpretation. For this reason we can expect a new volatility momentum of the USD/CAD currency pair.

Here we consider the USD/CAD on the H4 chart. The price breached the H4 bearish trend line in the direction of the green zone. New lows and highs are located above the previous ones, and that suggests the formation of a new bullish trend. After the Parabolic historical values crossed the H4 trend line, DonchianChannel reversed upwards, so this signal confirms the market sentiment. The only alarming signal comes from RSI-Bars oscillator: the last bar broke the bullish trend line downwards. The breakout can be confirmed as false only after the oscillator level crossing at 77.6035%. We expect it to happen at the same time or before the breakout of the price level at 1.13830. This mark can be used for opening a pending buy order. Currently, the bullish candlestick pattern "absorption" is formed near that level (marked in yellow). It confirms the short-term bullish trend. Stop Loss is recommended to be placed below the fractal support level at 1.12557.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal low. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 1.13830
Stop loss below 1.12557

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Euro slumps

Today we consider the EUR/USD currency pair on the D1 chart. At the moment the price is moving within the D1 downtrend channel: we can observe a slight retracement in the daily trend. The descending weekly channel also confirms the bearish trend significance. We have all the confirmations of the price movement from trend indicators: Parabolic historical values are moving along the trend line, and the price touches the lower boundary of DonchianChannel. There is no contradiction on the part of RSI-Bars oscillator: the signal left the downtrend channel area and broke the resistance line downwards (marked in red ellipse on the chart). That gives us an additional signal proving the current trend continuation. We expect the price retracement to be finished when it reaches the fractal resistance level at 1.26080. The current price mark can be used for instant execution order. Stop Loss is recommended to be placed at 1.27793, which is strengthened by the fractal peak and the intersection with the D1 trend line.

After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell current mark
Stop loss above 1.27793

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Slump hesitation

Positive data on the US labor market was published yesterday. ADP Non-Farm Employment Change was above the projected level (+7%), and its previous performance value as well (+2%). The index is based on the anonymous data study of about 400,000 American business clients. Employment is the main factor which influences the consumer demand in the United States, and so when the indicator growth is rising above the expected level, it will certainly cause the US dollar consolidation, which was observed last night. At the same time, the gold futures updated its low. It should be noted that the US stock market is still in the recovery stage, and investors tend to turn down defensive assets in favour of risky operations.
However, the fretted markets are concerned about the European geopolitical uncertainty. A possibility of imposing new sanctions against Russia and Minsk agreements violation may trigger tension again in the eastern Ukraine. If that happens, the demand for defensive assets such as precious metals may start to rise and the XAU/USD price fall would slow down.

Here we consider the daily price chart of the XAUUSD (Gold) futures. There was a breakout of the daily support line as the US positive data was released yesterday. However, the bearish paired candlestick pattern “absorption” was formed (marked in yellow), following right after the single pattern “shooting star”. The candlestick signals confirm the bearish market. Parabolic also continued the downtrend movement, and also we expect a prompt DonchianChannel reversal in the direction of the red zone. Currently, the price is moving along the lower channel border. You should pay special attention to the RSI-Bars oscillator signal. The last bar is located near the support line confirmed by the graphic model “double bottom” on the oscillator chart. For a confident sell position opening, we should wait for the level breakout at 17.8771%. In our opinion, it will happen when DonchianChannel(13) low is updated.

Note that the volumes of gold futures traded on the Chicago Mercantile Exchange confirm the current trend. Another high was being updated yesterday. Now it is located above the level of 375000 contracts. We suppose the further trend continuation would not allow the volume to fall below 187 000. You can monitor the trading volume by clicking here.
Considering all the confirmatory signals, a sell position can be opened at the current price mark. Stop Loss is to be placed above 1248.94. This mark is confirmed by the bearish trend line, and it is located above the Parabolic historical values. After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell current price
Stop loss above 1248.94

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Euro Index - ECB decision

Today we consider the currency index &EUR_Index composed on the basis of the Personal Composite Instrument - PCI technology. The index is designed to show the basic European currency fluctuations (EUR) against other segments of the Forex market. As a systematic market indicator we will use a portfolio of the most liquid currencies traded against the main European currency: EUR/[USD(4.35%)+JPY(18.2%)+GBP(18.8%)+CHF(19.2%)+AUD(19.8%)+CAD(19.65%)]. The price of each currency is expressed in USD. The weights are defined according to the currency liquidity relative to the volume of international bank circulation. Get more details and online index chart by clicking here.
Note that &EUR_Index reaction on the fundamental economic events in Europe is the most obvious and sustainable: the index forms a stable trend channel, meanwhile it is less susceptible to the fundamental events of other currencies. Let us remind you that the ECB meeting took place on Thursday and the interest loan rate was announced to remain unchanged at 0.05% per annum, deposit rates at -0.2%. This news was reported despite the promises of a prompt QE launching to boost the EU economy. The ECB statement caused a temporary euro weakening against the most liquid currencies. However, the result was predicted by the majority of the economists and the long-term bearish trend has not been formed. Currently, &EUR_Index is waiting for new fundamental signals, and it is still in a state of a long-term uncertainty despite the positive US data.

Here we consider the daily closing/opening price chart of the given instrument. It was composed in NetTradeX platform. We can see the price is drifting in sideways, which is confirmed by fractal highs and lows. The RSI oscillator signal has also formed a channel between 40% and 61% based on graphic models "double top" and "double bottom" (marked in black ellipse). We will expect a sharp volatility spike after the breakout of any of the channel limits as the fundamental news come out. Therefore, we propose to open two pending orders: Buy and Sell. A pending buy order can be opened above 1.00644, Stop Loss is better to be placed below 0.99542, which is confirmed by 4 Bill Williams fractals. A sell order is recommended to be placed in the opposite way. Conservative traders are recommended to wait for the oscillator breakout confirmation: it must overcome the local overbought/oversold levels of 40% and 61%.
After opening a position, the opposite one can be deleted: we give an opportunity for the market to choose the direction. Stop Loss is to be moved after the ParabolicSAR values, near the next fractal high (sell position) or fractal low (buy position). Thus, we are changing the probable profit/loss ratio to the breakeven point.
Position Sell
Sell stop below 0.99542
Stop loss above 1.00644

Position Buy
Buy stop above 1.00644
Stop loss below 0.99542

More information about the mechanism of portfolio operations is available on our website section Quick Guide for Creating and Trading PCI.

 

[IFCM]

Sideways market and expectation

Today we do not expect the release of significant fundamental events that may affect the price movement of the most liquid instruments of the Forex market. It means that we would focus on the psychological sideways trend of the market, which may be indentified with the help of technical analysis. The first important data will come out on Wednesday: the Bank of England Governor Mark Carney’s speech. Up until that point the most probable price movement of the GBP/USD is in sideways market. However, it can be breached as investors expect the US dollar to strengthen further.

Here we consider the GBP/USD on the H4 chart. The price is moving within the D1 and H4 trend: the bearish trends coincide. Currently, a retracement can be observed: it will be finished after the fractal support breakout at 1.57789. It will happen when Parabolic historical values cross the price, so that the trend indicator would reverse in the direction of the red zone. The significance of the support level is also confirmed by the lower boundary of Donchian Channel. The most alarming signal was received from RSI-Bars: the upward breakout of the trend line. Conservative traders are recommended to wait for the oscillator signal return into the trend channel area. Stop Loss is better to be placed above 1.60252. This mark is confirmed by the upper boundary of Donchian Channel and Bill Williams fractal.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.57789
Stop loss above 1.60252

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Business confidence remission

Today at 1:30 (CET) NAB Business Confidence index was released. It indicates the level of business optimism in Australia. This diffusion index is calculated every month by the National Australia Bank, based on a survey of more than 300 companies. The indicator allows estimating the investment climate improvement in the country, consumer spending and unemployment rate. This month the Business Confidence index has fallen 4 points vs. 5 points last month. Consequently, AUD/USD price dynamics was immediately affected. We may expect a further depreciation as the US dollar strengthens after the QE completion.

Here we consider the AUD/USD currency pair on the H4 chart. The price is moving within the D1 and H4 trends: the bearish trends coincide. At the moment we can witness a new trend formation, which will be intensified after the breakout of the fractal support at 0.85317. In the short-run, the current trend is confirmed by the candlestick pattern "absorption" (marked in yellow on the chart). We can also see there has already been the intersection of the Parabolic historical values and the trend indicator reversal in the direction of the red zone. The support level significance is also confirmed by the lower boundary of DonchianChannel. RSI-Bars oscillator verifies the current trend, but the final confirmatory signal is expected after the level breach at 39.7701%. In our opinion, it will happen when the price crosses the mark at 0.85317, which can be used for placing a pending sell order. Stop Loss is recommended to be placed above 0.86873. This mark is strengthened by the upper boundary of DonchianChannel, Bill Williams fractal and Parabolic historical values.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 0.85317
Stop loss above 0.86873

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Mark Carney’s speech

At 11:30 (CET) the Bank of England Governor Mark Carney will be giving his speech today. He will be discussing the BOE quarterly Inflation Report. The report is focused on inflation expectations and the actual economy state. An excessive currency expansion may cause changes in the regulator’s monetary policy, e.g. the base interest rate hike. On the contrary, a deflation risk triggers the monetary policy easing. Therefore, today we expect a possible volatility momentum of the British currency, after the situation over the last quarter becomes clear.

Here we consider the GBP/USD currency pair on the H4 chart. The price keeps moving in the daily bearish trend, but at the same time we can see the H4 trend line breakout in the direction of the green zone. The signal is strengthened with the neckline intersection of the bearish graphic model “head and shoulders”. We could have considered this position as an opportunity for opening a buy order, if we are not taking the D1 trend line proximity into account. It limits the potential motion compared to the possible risks. For this reason we can turn to the reflecting pattern called "Hound of the Baskervilles", which will be formed if the price breaks the support level at 1.57951. This level can be used for placing a pending sell order. It is confirmed by Parabolic historical values, Bill Williams fractal and the lower boundary of DonchianChannel. There is a high probability that this mark intersection would cause a strong bearish momentum. Currently, the price gives the first signs of a downward uncertain movement. You should pay attention to the "shooting star" candlestick pattern (marked in yellow on the chart). Besides, the formation of a new low of the RSI-Bars oscillator signal confirms the future price reversal. Conservative traders are recommended to wait for the oscillator support level breakout at 32.9498%, which will precede the main price down movement.
The preliminary Stop Loss can be placed above 1.59522. This level is confirmed by the fractal and the upper boundary of DonchianChannel (13). After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.57951
Stop loss above 1.59522

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Gold market equilibrium

Here we consider the XAUUSD (Gold) futures contract on the H4 price chart. The price was moving in the daily retracement before an unsteady balance of bears and bulls was formed (see the triangle on the chart). The last candlestick breached the H4 trend line downwards. However, there was no confirmatory signal on the part of the RSI-Bars oscillator.

The market is looking for equilibrium. In this case, two opposing orders can be opened on the basis of the resistance level at 1173.72 and the support level at 1145.30. Both marks are confirmed by the DonchianChannel boundaries, Parabolic historical values and Bill Williams fractals. After one of the orders was executed, the second one can be deleted. Let the market choose the price direction.

After position opening, Stop Loss is to be moved after the ParabolicSAR values, near the next fractal high (short position) or fractal low (long position). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1145.30
Stop loss above 1173.72

Position Buy
Buy stop above 1173.72
Stop loss below 1145.30

Dear traders. You can see the detailed report of the author’s account by clicking here.

 

[IFCM]

Market choice

Today at 14:30 (CET) Producer Price monthly Index should be released at US – PPI m/m. The indicator is formed by Labor Department and displays a percentage change of prices for US goods and services. PPI m/m is a basic inflation factor and takes into account three areas of production: manufacturing, commodities production and processing industry. The indicator publication may influence a volatility of most liquid currencies. Inflation is a key factor which defines a monetary policy of Fed and a pace of transition from quantitative easing (QE) to a traditional model of regulation. An acceleration of this process and a perspective of basic rate growth will inevitably lead to the strengthening of USD against other currencies.

Let’s consider EUR/USD instrument at H4 chart. A price is still moving inside a falling D1 and H4 trend channels. At the same time we may observe certain dangerous bullish signals. In particular, a triangle equilibrium has been broken in the direction of a green zone with simultaneous formation of bullish divergence of RSI-Bars oscillator. One of previous bars has broken the weekly (!) resistance level which is an important signal of bear’s attenuation. We suppose that unstable market equilibrium is observed and that an upward breakdown of D1 trendline is probable. At the same time we can not exclude a correction weakening with account of basic tendency influence. We shall give the market an opportunity to make a choice. For now it should be reasonable to consider two symmetrical opposite pending orders, formed with account of two key levels: 1.25817 и 1.23932. Both levels are verified by historical values of ParabolicSAR trend indicator, boundaries of Donchian channel and Bill Williams fractals. One of proposed levels may be used for pending order opening with stop level located below or above another key level. Under condition of first order activation, another one should be removed.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal maximum (short position) or minimum (long position). Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 1.25817
Stop loss below 1.23932

Position Sell
Sell stop below 1.23932
Stop loss above 1.25817

Dear traders. For the detailed report of the strategy based on the analytical issues of technical analysis click here.

 

[IFCM]

US Building permits

Today at 14:30 (CET) we expect the release of Building Permits issued monthly by the US government. The indicator allows estimating the growth potential of the US real estate sector, secondary demand goods and technology sector. The increase in indicator performance is expected today, compared with the past month data (1.04 million). Should the forecast become real, investors would feel more confident, and as a result, the US dollar would strengthen against other liquid currencies, including the British pound.

Here we consider the GBP/USD on the H4 chart. The price is still drifting downwards, while remaining in the bearish H4 channel. Parabolic trend indicator confirms the bearish bias: its historical values are moving along the upper Donchian Channel boundary, therefore intensifying its significance. There is no contradiction on the part of RSI-Bars oscillator, which continues hitting new lows. Conservative investors should wait for a confirmatory signal: the RSI support breakout at 26.3819%. In our opinion, it would happen before or coincide with the key price level breaking at 1.55855. This mark is confirmed by Bill Williams fractal and lower boundary of Donchian Channel. Stop Loss may be placed near the fractal high at 1.57404, coinciding with the current Parabolic value.

After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Sell
Sell stop below 1.55855
Stop loss above 1.57404

Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.

 

[IFCM]

Core price index and Canadian dollar

Today at 14:30 (CET) we expect the release of Core CPI which reflects the inflation trend of the Canadian economy. The index is published by the Statistics Canada and measures a change in the price of goods and services, excluding the 8 most volatile items. This indicator determines the inflation rate, which in turn affects the monetary policy and the interest rate established by the Bank of Canada. The Bank’s Governing Council takes the inflation expectations into account to limit the excessive pace of its growth due to the policy tightening. The rate hike leads to investment funds inflow in the country’s economy: this is the reason why CPI release may have a significant impact on the Canadian currency rate against its most liquid competitors.

Let’s consider the USD/CAD currency pair on the H4 chart. The price is moving in the daily bullish trend. We assume that the current retracement is about to be completed. One of the graphic signals of bearish strength is the pattern called “double bottom” (marked in red on the chart). It allows choosing the critical level for placing Stop Loss at 1.12587. Moreover, this level is confirmed by Parabolic historical values and the lower boundary of Donchian Channel. We should wait for the H4 trendline breakout to get the signal confirmation for opening a buy order. This breakout is supposed to coincide with the fractal level breach at 1.13718 and Parabolic upward reversal. The significance of this mark is also verified by the upper boundary of Donchian Channel. Conservative traders should wait for the resistance crossing of the RSI-Bars oscillator at 61.0597% to confirm the buy position opening.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal low. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position Buy
Buy stop above 1.13718
Stop loss below 1.12587

Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.