Today Eurogroup meeting takes place the whole day. The issues of the European economy and monetary affairs to support inflation are being discussed. We deem that higher volatility of the euro and its “partners” is expected today.
Let’s examine the GBP/USD currency pair on the H4 chart. The price is moving inside the H4 price channel, but rebounds at 1.50219. The trend is also confirmed by the RSI-Bars signal and DonchianChannel bias. However, we can see that the price approached the strong daily support line at 1.49326: it means there are two possible scenarios for further developments. Note that Parabolic signal is moving very close to the price, which indicates the trend weakening. We believe that a pending buy order with the risk with Stop loss placed below the daily support line in the oversold zone at 1.49326-1.50219. In case the bearish trend inertia would be sufficient for the breakout at 1.49326, the position should be hedged by placing a pending sell order below this mark. The H4 support line at 1.50219 would now act as the resistance line. Stop loss can be placed at this very mark.
After pending order placing, Stop loss is to be moved every four hours near the next fractal high (short position) or fractal low (long position), following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.
|Buy limit||below 1.50219|
|Stop loss||below 1.49326|
|Sell stop||below 1.49326|
|Stop loss||above 1.50219|