Sergey Kamenshikov, Ph.D.
IFC Markets
Good afternoon, dear traders. Markets gradually come to life after the recent holidays (Good Friday and Easter), which means we can look for trends dictated by fundamental changes and restoring trading volumes. Today at 16:00 (CET, server time) we will find out about changes in the composite index by the Conference Board Inc. (CB Leading Index). This indicator is based on 10 key indicators of the U.S. economy, including employment, consumer confidence index, new orders and the base lending rate. As the CB Leading Index is calculated on the basis of published data, its impact on the market will be negligible at the release time. Nevertheless, we should expect the price movement before the publication. In particular, as the index is projected to increase from 0.5% to 0.8 %, we will wait for strengthening the U.S. currency.
Let us consider the EUR/USD movement on the H4 chart. The Price crossed the H4 support line downwards, completing the bullish trend with it. It naturally happened a week after touching the resistance level. At the moment, the market momentum continues and the price is influenced by the bearish weekly trend. The ParabolicSAR also confirms the sentiment change, but the most powerful and rare signal was received from the RSI-Bars showing a bearish divergence. We would expect the price to move to the next level at 1.37804, which coincides with the previous PivotPoints support. Traditionally, we define a target above the first Fibonacci level of 161.8%.
It is proposed to place a pending sell order below the resistance level at 1.38043. The stop loss is selected according to the nearest resistance level around 1.38640. This is an advantageous position, because it is confirmed by the historical ParabolicSAR figures and the PivotPoints first resistance. The stop loss is recommended to move after the ParabolicSAR every 4 hours after the GTC is done. The position should be maintained until the CB Leading Index publication and switched into a break-even condition 15 minutes before the data release. The most optimal step would be to choose a break-even level below the historical ParabolicSAR values.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
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