By IFCMarkets

Good afternoon, dear traders. Today at 15:45 CET we expect the Governor of the Bank of England to introduce the quarterly report to the Treasury Committee of the UK Parliament, Inflation Report Hearings. A few members of the Monetary Policy Committee of the Bank of England will also attend the meeting. The main issues that are to be raised: inflation, the overall macroeconomic development and the monetary policy. We expect the British currency to increase volatility during the meeting, which usually lasts for several hours. Tight trade relations of Great Britain and other EU countries result in movement correlation of such currency pairs as GBP/USD and USD/CHF. The correlation coefficient, based on the last 13 H4 candlesticks, is located at the level of -64%. We anticipate that the report presented for the treasury Committee may influence greatly the USD/CHF rate. At the same time this will help to avoid dangerous volatility of the British pound.

Here we consider the given currency pair on the H4 chart. A rare numerical model is observed. The price moved beyond the H4 trend channel and formed a new channel, which is parallel to the previous one. The preceding resistance line transformed into the support line. The new channel had two upward lows, and now it shows a steady growth potential. The trend is confirmed by the DonchianChannel. There is no contradiction on the part of RSI-Bars oscillator. In order to lock the upward momentum we recommend you to wait for the oscillator level breach at 84%. A buy order can be opened if the upward movement continues, and there is a fractal resistance breach at 0.93781. At the same time we expect the Parabolic reversal into the green zone. Risks can be limited by the last fractal support at 0.93105, which crosses the trend support line. This level is also confirmed by the Parabolic historical values.

After position opening, Trailing Stop is to be moved after the ParabolicSAR values, near the next fractal trough. Updating is enough to be done every day after the formation of 5 new H4 candlesticks, needed for the Bill Williams fractal formation. Thus, we are changing the probable profit/loss ratio to the breakeven point.

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

Market Analysis provided by IFCMarkets