GBP/USD Technical Analysis - GBP/USD Trading: 2014-11-19

US Building permits

Today at 14:30 (CET) we expect the release of Building Permits issued monthly by the US government. The indicator allows estimating the growth potential of the US real estate sector, secondary demand goods and technology sector. The increase in indicator performance is expected today, compared with the past month data (1.04 million). Should the forecast become real, investors would feel more confident, and as a result, the US dollar would strengthen against other liquid currencies, including the British pound.

Here we consider the GBP/USD on the H4 chart. The price is still drifting downwards, while remaining in the bearish H4 channel. Parabolic trend indicator confirms the bearish bias: its historical values are moving along the upper Donchian Channel boundary, therefore intensifying its significance. There is no contradiction on the part of RSI-Bars oscillator, which continues hitting new lows. Conservative investors should wait for a confirmatory signal: the RSI support breakout at 26.3819%. In our opinion, it would happen before or coincide with the key price level breaking at 1.55855. This mark is confirmed by Bill Williams fractal and lower boundary of Donchian Channel. Stop Loss may be placed near the fractal high at 1.57404, coinciding with the current Parabolic value.

After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.

Position	Sell
Sell stop	below 1.55855
Stop loss	above 1.57404

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