By IFCMarkets

New Year’s bears

Today the monthly Consumer Confidence index will be released at 16:00 CET in the United States. The index provides a growth estimate of consumer spending. It is based on household survey. The indicator measures labor availability, business conditions, therefore, it is particularly interesting for investors. At that time we expect a volatility momentum on the US currency market. Let’s consider GBP/USD currency pair on the H4 chart. The major D1 trend and the H4 trend are influenced by bears. Parabolic historical values are moving along the trend line, confirming the investor sentiment.

At the moment Donchian Channel is consolidated: a new momentum is about to appear and retracement is to be completed. There is no contradiction on the part of the RSI-Bars oscillator. Moreover, the double bottom pattern was breached (marked in red ellipse) and the last three bars are located below this level. The price mark at 1.54939 can be used for opening a pending sell order. This level is confirmed by Parabolic historical values and the lower Donchian Channel boundary. Please note that this level and the trend line form a triangle with a bearish slope. Stop Loss can be placed at the fractal 1.56108, located above the 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.

Dear traders, analytical department of IFC Markets is wishing you love, health, professional progress and, of course, successful trading! Happy New Year!

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

Market Analysis provided by IFCMarkets