Technical Analysis by IFC Markets

[IFCMarkets]

The inflation data released yesterday in the EU added strong pressure on the euro: the monthly released Consumer Price IndexCPI indicated negative trend. In annual terms the index lost 0.2%, confirming the worst investor concerns. Deflation in the euro zone is becoming real, and it means there are more chances for the ECB to start the promised money printing. Even more pressure on the euro was added by the Wednesday’s shooting in France and no significant progress in catching the suspects. Today at 14:30 CET we expect the release of Unemployment Claims in the US. The report is released weekly by the US Department of Labor. The indicator allows estimating the domestic demand dynamics and the consumer loan potential for the US economy stimulus. If the indicator performance is better than the one released earlier (298 thousand contracts), it may lead to the euro plunge against the greenback.

Here we consider EUR/USD currency pair on the H4 chart. The last euro retracement finished with the doji candlestick pattern (marked in red ellipse on the chart). Bulls are completely exhausted and right after a timid surge, the euro continued free-falling. However, nearby there is the daily resistance line which can cause a slight retracement: you should be careful. Fortunately, we haveRSI-Bars oscillator at hand, so it can filter the false breakout. Now its values are located inside the bearish triangle. We would wait for a significant price channel breakout after the oscillator crosses 18.8551%. It is more likely to happen after the price intersection of the fractal support at 1.17957. This mark can be used by aggressive traders for placing a pending sell order, but we recommend them to monitor the oscillator chart. Stop Loss can be placed at 1.8989. This mark is confirmed by Parabolic historical values and Bill Williams fractal. After order execution, Stop Loss is to be moved near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

However, the situation of a strong retracement has little chances to happen. According to the figure, the volume of euro futures traded on the Chicago Mercantile Exchange is going up, confirming the trend. To monitor the volumes click here.

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

 

[IFCMarkets]

Today a few fundamental indicators of the Canadian economy are released at 14:30 CET: Building Permits, Employment Change and Unemployment Rate. The first indicator is published monthly and indicates the number of permits for new construction, issued by the government. The indicator allows estimating the growth potential of real estate sector and, as a consequence, we can assess the increase in consumption of secondary demand and technology goods. Taking the labor market data into account, this indicator determines the consumer demand in Canada. At the same time, all currency traders are looking forward to the labor market data released in the United States: Non-Farm Employment Change, which is published every month by the US Labor Department. The indicator change has a strong impact on consumer spending and investment appeal of the United States. It is also important to note that the indicator is published among the first ones and has a long-term impact on the market (up to one week). Thus, we assume that a new volatility momentum for USD/CAD currency pair is possible to surge at 14:30.

Here we consider USD/CAD on the H4 chart. The price reached the daily resistance line, made a reversal and formed a pullback. The preliminary trend line is made on the basis of ParabolicSAR historical values. RSI-Bars oscillator confirms the bearish signal: the final confirmation would be received after the breakout at 55.1948%. It will be likely to happen ahead of the price intersection of the fractal level at 1.17933. This mark can be used for placing a pending sell order. There are high chances to observe a short-term retracement because traders take profits before the Nonfarm release. As seen on the chart, the current candlestick is preceded by the “absorption” pattern, which includes doji: bears are still winning. Stop Loss can be placed at 1.18733. This mark is confirmed by Parabolic historical values, the Bill Williams fractal and the upper Donchian Channel boundary. After order execution, Stop Loss is to be moved near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

However, the possibility of the CAD long-term retracement is not yet confirmed by the trading volume. According to the figure, the volume of CAD futures traded on the Chicago Mercantile Exchange is going up, but hasn’t still outperformed the high of 80000 contracts. To monitor the volumes click here.

PositionSell
Sell stopbelow 1.17933
Stop lossabove 1.18733

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

 

[IFCMarkets]

Here we consider EUR/USD currency pair on the H4 chart. The US dollar slid after Buiding Permits were released on Friday. It resulted in the price retracement inside the bearish trend channel. However, we expect the general trend to continue: as soon as the price approached the resistance line, bearish pattern “absorption” was formed. The retracement completion can be connected with the strong level crossing at 1.17487. This mark is strengthened by the double bottom pattern (marked in red ellipse). Stop Loss can be placed above the last fractal at 1.18767. Conservative traders are recommended to wait for the RSI-Bars oscillator confirmation: it is necessary to wait for the bullish trend to be completed at the support breakout 27.1330%. After order execution, Stop Loss is to be moved near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionSell
Sell stopbelow 1.17487
Stop lossabove 1.18767

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

 

[IFCMarkets]

Today at 10:30 CET we expect the release of CPI/Consumer price index in the UK. The index is published monthly by the Office for National Statistics, and represents performance of the previous year. This form of representation allows avoiding the influence of seasonal factors on inflation rate. CPI is calculated on the basis of various goods and services. It is considered to be the main inflation indicator of the UK economy and is taken into account when the Bank of England is changing the base lending rate. The index increase amid favourable economic conditions usually leads to the British pound strengthening. Moderate inflation is also welcomed by investors as an indicator of natural economic growth. As deflation hit the EU, the risen UK CPI could attract additional investment and strengthen the national currency. We deem the news released today would result in volatility momentum of the British pound.

Here we consider GBP/USD currency pair on the H4 chart. The price is centered between the resistance of bearish pattern “double top” (marked in red ellipse) and the strong MN support line at 1.50305. The resistance line is located at the previous support level 1.51943, which provides extra significance. However, a bullish trend channel has begun its formation, and Parabolic values are moving along the uptrend support line. We believe bulls determine the price direction now. RSI-Bars oscillator confirms the trend. The only alarming sign is its trend line breakout. Conservative traders are recommended to wait for the RSI-Bars oscillator confirmation: the breakout at 55.5446%. We believe that it will happen after the price overcomes the double top level, which can be used for placing a pending buy order. Stop Loss can be placed at the MN support line, which is confirmed by the lower Donchian Channel boundary and the Bill Williams fractal. After order execution, Stop Loss is to be moved near the next fractal low. Thus, we are changing the probable profit/loss ratio to the breakeven point.

We have every reason to believe the uptrend to persist. The futures volume traded on the Chicago Mercantile Exchange dropped significantly. The current daily GBP retracement is not the formation of a new trend, so we expect the British pound to increase. The most cautious investors should wait for the level of 125000 contracts to be outperformed.

PositionBuy
Buy stopabove 1.51943
Stop lossbelow 1.50305

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

 

[IFCMarkets]

Today at 14:30 CET we expect CRS/Core Retail Sales to be published in the United States. The index is released monthly by the Census Bureau and indicates a relative change in the volume of retail sales, excluding automobiles (20% of the total volume). CRS estimates consumer spending. It is based on retail stores sampling of different types and sizes. This indicator measures consumer confidence, so it is of considerable interest for long-term investors. We deem the news released today would cause volatility momentum of the US dollar against the most liquid currencies, including euro.

Here we consider EUR/USD currency pair on the H4 chart. The price is consolidated inside the bearish triangle. The market neutrality trend will be finished with the release of new significant statistics. The triangle bias is also confirmed by ParabolicSAR historical values that move along the upper triangle side. At the same time there is a bullish divergence on the RSI-Bars oscillator chart: it creates a conflicting picture of technical analysis. In this situation, we need to consider both cases. It is recommended to place two pending orders, Buy Stop and Sell Stop, near the sideways channel borders. We emphasize that channel levels 1.17456 and 1.18791 are confirmed by DonchianChannel and Bill Williams fractals. The upper level is further strengthened by bearish “double top” pattern.
Risk mitigation is to be placed at the opposite levels. After order execution, another one may be cancelled. Stop Loss is to be moved after Parabolic values near the next fractal low (long position), or fractal high (short position). Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionBuy
Buy stopabove 1.18791
Stop lossbelow 1.17456

PositionSell
Sell stopbelow 1.17456
Stop lossabove 1.18791

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

 

[IFCMarkets]

Today at 14:30 CET Unemployment Claims will be released in the US. The data is published weekly by the US Department of Labor. This indicator measures domestic demand dynamics and the consumer lending potential for the US economy stimulus. It is of considerable interest for long-term and medium-term investors. We deem the news released today would cause volatility momentum of the US dollar against the most liquid currencies.

Here we consider GBP/USD on the H4 chart. The price crossed a triple top pattern (marked in yellow) and returned to the support level at 1.51853. For this reason, this mark can be used for placing Stop Loss when opening a long position. Since ParabolicSAR values move along the trend line and Donchian Channel has reversed in negative direction, there is every reason to believe that bulls are gaining strength. There is no contradiction on the part of the RSI-Bars oscillator: it confirms the trend. The next volatility momentum can be expected after resistance level overcoming at 68.4128%. We expect it will accompany the price level intersection at 1.52711, which can be used for placing a pending buy order. After your order was being opened, Stop Loss is to be moved after Parabolic values near the next fractal low. Thus, we are changing the probable profit/loss ratio to the breakeven point. Conservative traders may also consider the alternative case, which is possible to happen if positive US data is released. Thus, a pending sell order may be placed at the support breakout below 1.51052.

PositionBuy
Buy stopabove 1.52711
Stop lossbelow 1.51853

PositionSell
Sell stopbelow 1.51052
Stop lossabove 1.52711

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

 

[IFCMarkets]

Today at 14:30 CET Core CPI m/m will be released in the United States. The index is published monthly by the Bureau of Labor Statistics. It measures the change in prices for goods and services, excluding the most volatile components: food and energy. The indicator measures inflation, which in turn affects the US monetary policy and base rates. Members of the Federal Open Market Committee (FOMC) take the inflation outlook into account to restrain its excessive growth pace due to tightening policy. Rate hike leads to an influx of investment funds in the economy. For this reason, CPI release may cause volatility momentum of the US dollar against the most liquid currencies.

Here we consider EUR/USD currency pair on the H4 chart. The Swiss National Bank (SNB) turned down the protection policy of the average exchange rate of two currencies (EUR,CHF) at 1.20 francs per euro. The regulator was forced to take this measure amid long-term euro depreciation. Floating exchange rate made the European currency soar even deeper and triggered a sell-off. We can observe the daily bearish trend, which proceeded after a slight retracement within the channel 1.16132-1.17252. Parabolic historical values are moving along the trend line, confirming its strength. You should also pay attention to the bullish divergence completion on the RSI-Bars oscillator chart and the trend reversal. Dashed line marks the preliminary trend line which will be confirmed only after the support level intersection at 18.4161%. We expect it will accompany the price level crossing at 1.15665, which can be used for placing a pending sell order. Stop Loss can be placed above the last strong support at 1.17252, which now acts as resistance line. After order opening, Stop Loss is to be moved after Parabolic values near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point.

The volumes of futures and options on euro traded on the Chicago Mercantile Exchange has increased greatly after yesterday’s news. The number of contracts outperformed the local peak of 400 000 and has continued to grow as the trend is developing. The volume confirms the bearish sentiment and investor fears on the European currency.

PositionSell
Sell stopbelow 1.15665
Stop lossabove 1.17252

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

 

[IFCMarkets]

Today at 13:00 CET the Bundesbank monthly report will be released. It contains articles, speeches, statistics and etc. The German GDP is ranking at the top of the EU members. Therefore, the regulator’s report affects greatly capital markets if the official ECB stance differs from the Bundesbank data. According to the ECB latest statement, deflationary risks are rising and the labor market is recovering in a slow pace. The Germany’s central bank report is monitored by long-term and medium-term investors with utmost care.

Here we consider EUR/USD on the H4 chart. The price crossed upwards the H4 trend line, which is the first sign that bulls are gaining strength. At the same time, there is a weak bullish divergence on the RSI-Bars oscillator chart, despite the trend line reversal. The bullish trend is likely to strengthen in case of a resistance level breakout at 1.16554. In this case, Stop Loss is recommended to be placed below the last fractal support at 1.14586. This mark is strengthened by the lower boundary of DonchianChannel. The second alternative situation assumes the trend continuation after the retracement is finished. Note that Parabolic trend indicator is currently confirming the bearish direction. In such a situation, a pending order can be placed at opposite levels. Let the market choose the price direction. After order execution, another one may be cancelled. Stop Loss is to be moved after Parabolic values near the next fractal low (long position), or fractal high (short position). Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionBuy
Buy stopabove 1.16554
Stop lossbelow 1.14586

PositionSell
Sell stopbelow 1.14586
Stop lossabove 1.16554

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

 

[IFCMarkets]

Today at 14:30 CET Manufacturing sales will be released in Canada. The indicator is published monthly by Statistics Canada. It’s a leading indicator of consumer spending and employment. For this reason the statistics is important for investors who expect the potential dividends from long-term investment. We assume that the indicator release may result in increased volatility of the Canadian dollar against other liquid currencies.

In order to diversify investment possibilities, today we consider USD/CAD on the D1 chart. The price crossed the strong weekly resistance line and formed a new daily uptrend channel. It was accompanied by the breakout of the upper triangle side, which has a bullish bias. ParabolicSAR historical values move along the trend line, increasing its strength. RSI-Bars oscillator also confirms the trend. There is no contradiction on the part of DonchianChannel (13). The price is moving along the upper border, constantly updating the channel peaks. Bulls gained a massive foothold. We deem the next bullish momentum would occur after the fractal resistance crossing at 1.20515. This mark can be used for placing a pending buy order. Conservative investors should wait for the oscillator breakout at 85.0433% to confirm the price breakout. Stop Loss is to be placed below the last support at 1.17792, which is confirmed by the trend line and Parabolic historical values. After order opening, Stop Loss is to be moved after Parabolic values near the next fractal low. Thus, we are changing the probable profit/loss ratio to the breakeven point.

At the moment, the volume of CAD futures traded on the Chicago Mercantile Exchange doesn’t confirm the trend: the level of 120 000 contracts has been outperformed. The most cautious investors are recommended to wait for the breakout of this level to verify the bullish market. You can monitor the trading volumes by clicking here.

PositionBuy
Buy stopabove 1.20515
Stop lossbelow 1.17792

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

 

[IFCMarkets]

Today at 14:30 CET Building Permits will be released in the United States. The indicator is published monthly and indicates a number of permits for new construction, issued by the government. It allows estimating the growth potential of the real estate sector. As a result, we can assess the increase in the consumption of secondary demand goods and the ones of the technology sector.

Today we consider the GBP/USD currency pair on the D1 chart. The price came closer to the weekly support line: we expect a reversal into the green zone direction. The RSI-Bars oscillator has been showing a weak bullish divergence for a month, and over the past few days there has been an upward momentum that should lead to the resistance level breakout at 39.3211%. We assume it will accompany the price level breaking at 1.52776. This mark can be used for placing a pending buy order. After the resistance level is broken, Parabolic indicator will change the bias into the bullish one and DonchianChannel’s upper boundary would be reached. Therefore, we would get the last missing confirming signals. Stop Loss can be placed below the daily support line at the last fractal low 1.50246. After order opening, Stop Loss is to be moved after Parabolic values near the next fractal low. Thus, we are changing the probable profit/loss ratio to the breakeven point.

Currently, the volume of GBP futures traded on the Chicago Mercantile Exchange doesn’t confirm the trend: the level of 170 000 contracts hasn’t been outperformed. The most cautious investors are recommended to wait for the breakout of this level to verify the bullish market. For tracking trading volumes, please visit the Chicago Mercantile Exchange (CME) website.

PositionBuy
Buy stopabove 1.52776
Stop lossbelow 1.50246

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

 

[IFCMarkets]

We continue to keep an eye on the euro as the ECB launched quantitative easing program. Recall that the regulator will start money printing this March. This is a bond-buying program in the amount of 60 billion euro paid monthly. The program will last until September of the next year, and the total amount will exceed 1 trillion euro. The event is a milestone for long-term investors: the cash filling would bolster exporters, but it currently leads to the euro depreciation and inflation in the eurozone. The euro opened with a bearish gap on Monday (D1 chart). Positive data on business climate in Germany softened the market reaction: there is a possibility of a weak retracement which can be used to search for a suitable entry point. Eurogroup will hold another emergency meeting due to growing conflict in Eastern Ukraine. The meeting results are not really promising for strengthening trade relations of the EU. The issue on the next round of sanctions will be raised; therefore, we expect a new impetus of euro weakening.

We can see that EUR/USD has accelerated in falling, breaking the weekly and daily support lines. The current daily price channel is confirmed by the lower Donchian Channel and Parabolic historical values. We expect the confirmation of the last breakout on the RSI-Bars oscillator chart. After the bar breaks the level at 10.4633%, we will get the signal for going short. It will probably coincide with the local support price breakout at 1.10969. This mark can be used for opening a pending sell order. Stop Loss is to be placed at the resistance line, for example, below the last fractal support at 1.14320. After order opening, Stop Loss is to be moved after Parabolic values near the next fractal high. Thus, we are changing the probable profit/loss ratio to the breakeven point. Partially, 50% of the position can be closed near the monthly support line.

PositionSell
Sell stopbelow 1.10969
Stop lossabove 1.14320

 

[IFCMarkets]

Let’s consider an H4 chart of GBP/USD trading instrument. The price has tested a daily support level (1.49359), but has failed to punch it eventually. This marks a sudden change of market sentiment in favor of bullish momentum. We emphasize that the significance of this mark is confirmed by historical values of Parabolic trend indicator, fractal of Bill Williams, as well as the lower boundary of the Donchian channel. However RSI-Bars bullish divergence is definitely the most remarkable signal which is observed from the beginning of January. Current bars are located in the vicinity of 58.8971% resistance level.

We suppose that a breakdown of this level may be a final confirmation of a counter trend movement. Most likely it will occur after the crossing of local price resistance 1.51339, which can be used for the BUY pending order placement. Risks should be limited below the daily fractal resistance (1.49359). After order opening, Stop Loss is to be moved after Parabolic values near the next fractal minimum. Thus, we are changing the probable profit/loss ratio to the breakeven point.

PositionBuy
Buy stopabove 1.51339
Stop lossbelow 1.49359

 

[IFCMarkets]

Let’s consider the EUR/USD currency pair on the H4 chart. We continue to keep an eye on euro as ECB announced quantitative easing program. Recall that the ECB regulator will start printing money this March. The planned bond-buying program amounts to 60 billion euro every month. The QE program will last till September 2016, with total purchases surpassing 1 trillion euro. This event is a landmark for long-term investors: the liquidity filling will support exporters, but currently it leads to euro weakening and causes inflation in the euro zone. As a result, the monthly and weekly movements of EUR/USD are still negative: major investors are fretted, and we won’t try to resist the policy of financial institutions, analyzing only sell signals.

The H4 trend is fully consistent with the long-term trends. The price currently shows the consolidation period: this uncertainty is determined by geopolitical tension in Ukraine and the first profit-taking by the traders who went short. We expect a new volatility impetus after the price breaks the triangle downwards. A pending sell order may be opened below the support level at 1.12540, which is confirmed by the lower boundary of Donchian Channel and the Bill Williams fractal. Conservative traders are recommended to confirm the price breakout based on the oscillator signal. At the moment RSI-Bars indicates the trend reversal in favour of bears. The "double top" bearish pattern was formed at 55.3694%. The final confirmation of the price breakout can be obtained after the oscillator bar overcomes the support level at 38.6066%. Stop Loss is to be placed above 1.13888. This mark is confirmed by Parabolic historical values and the last resistance fractal. After order opening, Stop Loss is to be moved after 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 1.12540
Stop loss above 1.13888

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

 

[IFCMarkets]

Let us consider the GBP/USD currency pair on the H4 chart. The H4 and daily trends have a bearish momentum: we observe synchronizing scales that make us more confident about short position opening. ParabolicSAR values are moving along the current trend, confirming its negative bias. The last fractal support, strengthened by the lower boundary of Donchain Channel, is tracing an important level. Its breakout is likely to result in a strong volatile movement towards the red zone. The 1.49802 mark may be used for placing a pending sell order. We recommend conservative traders to wait for confirmation from RSI-Bars oscillator, which has to breach the 34.4285% level simultaneously. In such a manner, we will get verification from every analytical instrument available.

Stop loss may be placed in advance at 1.51003 support level. We would like to point out that this mark is confirmed by two Bill Williams’s fractals (double bottom), the upper boundary of Donchain Channel and by Parabolic historical values. This level can be broken up only in case of fundamental changes in market structure. If this occurs, the price will cross both the daily and H4 trend lines, with bulls taking the initiative. Taking the current situation into account, this is unlikely to happen. After pending order placing, stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Sell
Sell stop below 1.49802
Stop loss above 1.51003

 

[IFCMarkets]

Today at 14:45 CET ADP Non-Farm Employment Change indicator will be issued in the US. The index is provided by Automatic Data Processing every month and is based on reckoning anonymous data of about 400 000 American business clients. Agriculture and government sectors are not included in the filing. The preliminary estimate is announced 2 days ahead of official Non-Farm Employment Change release. That is why the indicator deserves a closer look. Employment is a key factor, affecting consumer demand in the USA; a worse-than-expected decline in Non-Farm Employment Change is likely to pull down the American currency. We recall that Canada’s Ivey PMI will become public today at 16:00 CET. A survey among 175 purchasing managers from different economy sectors evaluates employment, production, new orders, prices, supply and reserves. This indicator estimates expansion or contraction in production together with purchasing managers’ activity. The USD/CAD currency pair is expected to become more volatile after the data publication.

Let us consider the USD/CAD:H4 chart. After leaving the triangle, the price crossed the H4 resistance line. At the moment we observe a pullback as oil prices sagged: reduced number of US oil wells and strike of several trade unions resulted in crude oil rally. Yet, $50-55 a barrel keep 80% percent of American oil pumps cost efficient, so we expect a downward movement to be on the way. Bullish momentum will be continued if 1.28112 fractal resistance is breached; you may place a long pending order at this mark. However, we advise you to keep an eye on the RSI-Bars oscillator, which latest bar broke through the support line. Conservative traders are recommended to wait until the price is back into the bullish trend corridor. Stop loss may be placed at the previous resistance level, which can be now considered as the support line – 1.22514. After pending order placing, Stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Buy
Buy stop above 1.28112
Stop loss below 1.22514

 

[IFCMarkets]

Today at 12:00 СЕТ the Bank of England is to hold a regular meeting. Investors expect the interest rate to remain the same (0,5%) and are moderately pessimistic about English economy current state. Pound has been strengthening against dollar for 3 consequent days, owing to good Manufacturing, Construction and Services PMI, issued on Monday, Tuesday and Wednesday, respectively.Jobless Claims and Q4 Non-Farm Productivity are announced at 13:30 CET today in the USA: estimated data are relatively weak. At the same time US Trade Balance for December will become public. It is likely to be positive, but overall statistics may undermine the American currency. Our analysts believe the data publication will reinforce GBP/USD. Over the last six months pound has lost 11% against greenback. It is high time for the pound to rebound.

Let us consider the GBP/USD currency pair on the H4 chart. Leaving behind the down trend, the price breached the H4 resistance line. We observe a surge, which followed pullback to the trend line. Bullish momentum will be continued if 1.52757 fractal resistance is crossed: you may place a long pending order at this mark. However, we advise you to keep an eye on the RSI-Bars oscillator, which is overbought. Conservative traders are recommended to wait until the price gap (which was developed in January, 2-5) is bridged. Stop loss may be placed at the level of 1.511, indicated most recently by Parabolic. This mark can be now considered as the support line. After pending order placing, Stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Buy
Buy stop above 1.52757
Stop loss below 1.511

 

[IFCMarkets]

Let us consider the USD/CHF H4 chart. The instrument clearly moves sideways, depreciating trend indicators. That is why our attention is drawn mainly to graphic patterns and oscillators, able to filter out false breakouts. At the moment we observe a bearish-biased triangle. The trend is also confirmed by the RSI-Bars oscillator, indicating the movement towards the red zone. In this regard we deal with sell signals only.

An important support line is formed currently at 0.91532. It is confirmed by the Donchian Channel lower boundary and 2 Bill Williams fractals. We recommend making sure the support breakout is accompanied with breaching the oscillator support of 42.2748%. A sell pending order may be placed at this level. Stop loss may be placed at the triangle height of 0.93475. This mark is also confirmed by the Parabolic values. You may partly close the position at 0.89824, which conforms to historical fractal support. After pending order activation, Stop loss is to be moved every four hours near the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Sell
Sell stop below 0.91532
Stop loss above 0.93475

 

[IFCMarkets]

Let us analyze the USD/JPY pair on the H4 chart. This morning Japan announced several minor economic indicators. They appeared to be negative. Q4 Housing Loans and Tertiary Industry Index for December turned out to be worse-than-expected. To be noted, Industrial Production for December will be released on Wednesday at 23:50 CET in Japan. The tentative outlook is positive for yen, resulting in USD/JPY currency pair downward movement. It is to be considered when trading, as well as the fact that no important Japanese macroeconomic data are expected this week. Today at 15:00 CET Wholesale Inventories will be issued in the USA. The forecast is neutral. Market may react, if real figures deviate widely from estimated ones.

On the H4 time frame the USD/JPY steadily moved far above the triangle. Then it showed a slight pullback and formed a “flag” pattern. As a rule, it implies the current trend, which is the uptrend now, to continue. The RSI-Bars oscillator shaped a combination of similar figures, which confirms the trend in our judgment. The RSI latest bars didn’t go below 50. This is a good “bullish” sign, supposing yen to weaken further. To be kept in mind, Industrial Production may affect the trend, if data appear to be too positive. Probably, conservative traders had better wait for the data release. Yet, we don't rule out further “bullish” momentum after the fractal resistance is breached at 119.216: you may place a buy pending order there. Stop loss may be placed at 117.777, indicated most recently by Parabolic. This mark can be considered as a support line at the moment. After pending order activation, Stop loss is to be moved every four hours near the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Buy
Buy stop above 119,216
Stop loss below 117,777

 

[IFCMarkets]

Let us consider the EUR/CHF currency pair on the H4 chart. We have chosen it because no important macroeconomic data are expected today from the USA. Yesterday Switzerland announced several economic indicators for January. They turned out to be slightly better-than-expected. Among other things, deflation marked a decrease. Our analysts suggest that it is a factor underpinning the franc. Forthcoming Swiss important data will be issued only on February, 18-19. Until then, Swiss franc may strengthen against euro. The single currency can be undermined by crisis in Greece and tomorrow Germany inflation report.

If we look at the H4 chart, the EUR/CHF has been traded at a narrow neutral range for quite a long time. The corridor was shaped by Swiss franc pulling back after the intense growth. To recap, the Swiss National Bank abandoned the fixed euro-franc exchange rate on Jan. 15, 2015. The EUR/CHF chart shows a sharp fall this day, followed by rebounding to 61.8% Fibonacci level. We suppose this movement to be succeeded with decline. The RSI-Bars oscillator displays downtrend as its bars went below 50. This is a good “bearish” sign implying euro to weaken against Swiss franc. Consequently, we do not exclude further downward momentum after the fractal support is breached at 1.04116: you may place a sell pending order there. Stop loss may be placed at 1.0592, indicated most recently by Donchian channel. This mark can be regarded as the resistance line at the moment. After pending order activation, Stop loss is to be moved every four hours near the next fractal high, following Parabolic or Donchian signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.

Position Sell
Sell stop below 1,04116
Stop loss above 1,0592

 

[IFCMarkets]

Today at 10:30 СЕТ the Bank of England will issue inflation report and hold a press-conference with Mark Carney (the governor). Most market participants expect inflation forecast to be cut and focus attention on Mark Carney's account for the prospective of the Bank of England rate hike. He is supposed to comment on real estate market and mortgage rate dynamics. It's hard to predict the effect it may produce on the pound.

It has slumped by 13% since mid-July and is currently traded in a narrow range. The pound may strengthen against the dollar after the release of British economic data today. Important indicators also become public today in the US: Retail Sales and Jobless Claims at 13:30 CET and Business Inventories at 15:00 CET. Our analysts believe the tentative outlook is positive for the dollar. Careful investors are recommended to wait for the data publication though. To be noted, less important Construction Output will be released in the UK tomorrow. It may underpin the pound (in case today it advances).

If we look at the H4 chart, the GBP/USD has been traded in a narrow neutral range for quite a long time. The corridor was shaped by the pound rebounding after the sharp fall. We do not rule out that the GBP/USD may finish the sideways trend moving higher, backed with today's positive macroeconomic news. Consequently, a “bullish” momentum may continue as the fractal resistance is breached at 1.52985: a buy pending order may be placed there. Stop loss may be placed at 1.5195, indicated most recently by Donchian channel. This mark can be regarded as the support line at the moment. After pending order activation, Stop loss is to be moved every four hours near the next fractal low, following Parabolic or Donchian signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered. Since our forecast relies on fundamental analysis, we leave the room for opening sell positions. It is possible, if the Bank of England statement and American statistic fail to meet expectations. In this case the fractal levels indicated are to be swapped.

Position Buy
Buy stop above 1,52985
Stop loss below 1,5195