EURUSD: Forex Technical Analysis November 24, 2014

By IFCMarkets

At 11:00 CET the Bank of England Governor Mark Carney will be giving his speech tomorrow before the Treasury Committee of the UK Parliament. This planned speech is devoted to the BOE quarterly Inflation Report and British economic outlook. Members of the Monetary Policy Committee (MPC) will also comment on the currency market state and economic development. We assume that this event may lead to volatility boost of European currencies, as inflation rate is the main factor which can influence the monetary policy of the EU. Let us remind you that at the moment deflation threat is the most risky factor for the European economies’ recovery.

Here we consider the EUR/USD on the H4 chart. As the expectations of the German Ifo Business Climate Index were beaten, there is a high probability of a temporary EUR retracement. However, a significant momentum that followed the Draghi’s statement on Friday let us expect the trend to go on, especially that the statement prompted the price to breach the triangle in the direction of the red zone. The downtrend is confirmed by the daily bearish trend, as well as the Donchian Channel bias. Current Parabolic values cross the D1 and H4 trend lines, thereby increasing their significance. There is no contradiction on the part of the RSI-Bars oscillator. Double-confirmed support at 1.23563 can be used as a key level for opening a pending sell order. This mark intersection would presumably coincide with the oscillator level breakout at 26.7153%. Conservative traders should better verify that. Stop Loss can be placed at 1.25711 of the conservative resistance, which is located at the intersection with the historical values of indicators and both trend lines.

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.

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