By IFCMarkets
Expecting statistics
Today at 16:00 CET we expect ISM Non-Manufacturing PMI to be published in the US. The index is released monthly by the Institute for Supply Management, on the third trading day. ISM index is the result of a monthly survey of more than 400 purchasing managers, excluding the manufacturing industry. Purchasing managers are asked about employment, price levels, suppliers, and inventories. If the index is below 50, it indicates economic recession due to reduced activity, especially if the trend remains for several months. We expect the index release would result in volatility momentum of the most liquid currencies against the US dollar.
Here we consider GBP/USD currency pair on the D1 chart. The bearish trend channel has approached the significant support line (MN). At the moment, Parabolic historical values are moving along the D1 trend line. Donchian Channel is also demonstrating the negative bias. Thus, there are no technical conditions for the trend slowing. We also see that the last bar of the RSI-Bars oscillator crossed the trend line. The trend direction is changing towards the red zone, excluding the divergence to happen. The fractal support breakout at 1.51851 would surely result in a new large-scale weakening of the British pound. This mark can be used for opening a pending sell order. On the other hand, the trend stability may not be sufficient for the MN support line breakout. Therefore, the second pending order is placed above the closest resistance at 1.56038. Risk mitigation levels are placed symmetrically.
Conservative traders are also recommended to wait for the trading volume to reach above the local high. At the moment the market is recovering after holidays. The daily volume of contracts traded on the Chicago Mercantile Exchange has not yet outperformed 120000. We will expect this mark to be exceeded to confirm the trend. To monitor the trading volumes click here.
| Buy Stop | above 1.56038 |
| Stop Loss | below 1.51851 |
| Sell Stop | below 1.51851 |
| Stop Loss | above 1.56038 |
Dear traders. For the detailed report of the strategy based on analytical issues of technical analysis click here.
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