Good afternoon, dear traders. Today we expect a publication of two US key macroeconomic indicators: NY Empire State (14:30 CET) and Industrial Production (15:15 CET). Both allow assessing a manufacturing sector economic health. However, the Empire State index is based on a survey of 200 manufacturers in New York State and is ambiguous for the interpretation of the entire production sector. In contrast, the Industrial Production shows the value of all manufactured goods in the United States, adjusted for inflation, which is important in terms of production growth. Mining and utilities sector are used for the calculation of index as well. The growth of Industrial Production stimulates increase in employment and income, which is a positive signal for the economy of the US as a whole. Today we expect that the publication of Industrial Production will bring the main pulse and volatility. It may have a significant impact on the price of USD/CHF instrument.
Let’s consider the four-hour chart for a given currency pair. A price has broken the resistance line of a H4 channel. However an oscillator continues to show bearish divergence. Reversals of the trend indicator Parabolic and DonchianChannel are not fixed yet. At the moment we may assume that the breakdown is false, i.e., the price will return inside the downward trend channel, expanding its volatility. To verify this, it is advisable to wait for the break of RSI-Bars resistance level 44.4%. In our opinion it will happen simultaneously with the intersection of the fractal support 0.93197. This mark may be used for the opening of a pending order. Conservative investors are advised to limit the risks above the upper channel wall Donchian, crossed by historical values of Parabolic – 0.93790 mark.
After position opening, Trailing Stop is to be moved after the ParabolicSAR values, near the next fractal maximum. 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.
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