Happy Holidays

Christmas break from December 23 until January 1

During this period we will not provide our signal service. We will resume our service on January 4.

We wish everyone Happy Holidays as well as a healthy, joyful and prosperous New Year 2016.

Corrections In The USD Are Likely To Be Short-Lived

Dear Traders,

The biggest story yesterday was the euro which rose against the U.S. dollar and traded well above 1.09. The reason for the correction can be attributed to positioning. Hedge funds reduced their dollar long positions on speculations the Federal Reserve will wait until at least April to raise interest rates again. However, we expect the dollar to resume its uptrend within the first months of the new year, but it might be difficult for dollar bulls to extend gains far beyond the 1.05-area in the EUR/USD. For the time being we expect the currency pair to remain range-bound between 1.0950/85 and 1.0810.

The British pound was accompanied by a slight bearish bias but remained firm above the 1.4875-area. In a next step, the pair will need to break the 1.4860-mark to the downside in order to gain further downward momentum. A reason for the GBP’s recent weakness is the Bank of England’s dovish monetary policy outlook. The BoE signaled the need for tighter policy is less immediate. Moreover, the U.K. Referendum on Britain’s European Union membership, which may take place as early as June, is weighing on the pound. The referendum could damp oversees investment into the U.K.. Consequently, the risk is to the downside. GBP may find a next support at around 1.4810/20. Below 1.4780 lower targets will be at 1.47, 1.4640 and 1.4590.

Today’s focus will be on U.S. data such as Personal Consumption, GDP revisions and Existing Home Sales. If data disappoints to the downside, we could see a slump in the USD.

9:30 UK Public Sector Borrowing

13:30 USA GDP & Personal Consumption

15:00 USA Existing Home Sales

(Timezone: GMT)

This is our last trading day of this year. We look forward to a successful year in 2016 and will continue to share many more profitable strategies with our subscribers.

We wish you all a very happy, healthy and prosperous New Year!

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Quiet Trading

Dear Traders,

These are the very last days of the year and many institutional investors have already closed their books. Despite some important economic reports scheduled for release within the next 3 days, this shortened trading week is expected to be very quiet.

The most important reports coming from the U.S. will be Q3 Gross Domestic Product figures, Existing Home Sales due for release on Tuesday and Personal Income scheduled for release alongside Durable Goods Orders on Wednesday. Most of these reports are expected to show softer numbers, which may lead to a minor weakness in the U.S. dollar’s uptrend. However, going into 2016, monetary policy remains the dominant theme. With the Federal Reserve remaining on track for tighter monetary policy while other central banks are tending towards an accommodative policy stance, the dollar should receive attraction throughout 2016.

Sterling traders should keep an eye on the U.K. GDP numbers, due for release on Wednesday. If data will be in line with expectations, the impact on the currency pair will be limited.

Let’s have a look at the technical side:

EUR/USD

As previously noted, the 1.08-level remains important to pay close attention to. Prices formatted a head-shoulders pattern, predicting upcoming bearish momentum once the 1.08-mark is significantly breached to the downside. Lower targets could be at 1.0708 and 1.0640. We see an important support area at 1.0550. Below 1.0520, the currency pair could free-fall towards 1.0465 and 1.04. However, current resistances could be at 1.0930 and 1.10. With sustained prices above 1.10 we consider the head-shoulders pattern as void.

Chart_EUR_USD_4Hours_snapshot21.12.15

GBP/USD

Sterling is currently trading around the support line of its downward channel. A break below 1.4850 could reinvigorate fresh bearish potential, whereas a break above 1.4965 may drive the pair towards 1.50 and 1.5050.

Chart_GBP_USD_Daily_snapshot21.12.15

We wish traders profitable trades just before the Christmas holidays and recommend not to invest too much during these days and take profits at smaller targets.

Please note that we will take a Christmas break from December 23 until January 1. During this period we will not provide our signal service. We will be back on January 4.

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We wish you good trades and many pips!

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Much Ado About Nothing

Dear Traders,

In the end there was ‘much ado about nothing’. Market participants who had hoped for immediate sustainable moves after the Fed’s decision, were disappointed. The price action was relatively muted with only small fluctuations to both sides. In the end the U.S. dollar was the winner and accelerated against the euro and British pound.

Federal Reserve policy makers unanimously voted to raise interest rates up to 0.5 percent. This alone was the most hawkish scenario as there were no dissenters. Moreover, policy makers forecast an appropriate rate of 1.375 percent at the end of 2016, indicating four rate increases next year. This is unambiguously less dovish than the market anticipated. The FOMC is confident that inflation will rise and highlighted that the risks to the outlook for economic activity and the labor market are now “balanced”.  On the bottom line the Fed statement encouraged dollar bulls not to give up on the dollar rally in the long-run. Nonetheless, we expected more momentum on that historic day. Investors are likely to begin their holiday season now, a reason for smaller movements and a decline in volume.

Important data for today (timezone GMT):

9:00 EUR German IFO Report

9:30 UK Retail Sales

13:30 USA Philly Fed Index 

The reports could have a short-term impact on the currency pairs, but market participants are likely to digest the new Fed era and could be looking to buy dollars at lower levels. We therefore generally expect a bearish bias.

EUR/USD: Traders should pay close attention to the 1.08-level. If the euro falls below 1.0780, we see chances that it drops 100-200 pips towards the south.

GBP/USD: The focus is on the 1.49-barrier. Once this level is significantly breached, GBP could find a next support at 1.4820/15.

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UP Or DOWN For The USD?

Dear Traders,

Today is going to be an historic day, as the Federal Reserve is expected to normalize monetary policy and end seven years of near-zero interest rates. The following guidance is expected to be dovish, implementing less than three increases of 0.25 percentage points in 2016. Market participants will turn their focus to the FOMC Press Conference, led by Fed Chair Janet Yellen. It might be a communicative challenge for Ms. Yellen, as the Fed neither want to cause turbulence with any hawkish comments nor want to lose their credibility. Anything can happen today, so traders should prepare for big moves in either side. If Yellen signals a clear guidance regarding the Fed’s tightening cycle, the USD could rally. However, the risk is to the downside for the greenback, as any cautious comments could trigger a sharp selloff.

The U.S. dollar advanced against its major peers going into the Fed’s decision. The British pound dropped like a stone on the Bank of England’s dovish monetary policy outlook. BoE Governor Carney said in an interview that economic conditions for a U.K. rate hike are not yet in place. The U.K. central bank has signaled it is in no rush to follow the Fed which is forecast to begin policy tightening.

The U.K. Employment Report is scheduled for release today at 9:30 GMT and the focus will be on Average Weekly Earnings. If wage growth comes in softer than expected, sterling could be vulnerable to further losses.

Eurozone Consumer Prices are due for release at 10:00 GMT, but as long as data meets expectations, the impact on the euro could be limited.

The Federal Reserve decides on monetary policy at 19:00 GMT, followed by the press conference at 19:30 GMT.

Let’s have a look at the technical side:

EUR/USD

Looking at the daily chart, we see the pair still trading within a downward channel. Depending upon the Fed speak, we see some chances that dollar bulls may drive the EUR/USD to lower levels. Lower targets could be at 1.0840 and 1.08. In case the pair falls significantly below 1.0780, the focus turns to 1.0690 and 1.0635. The support line is at 1.0450 but an unambiguously hawkish statement would be needed in order to send the pair towards such levels.

A bullish scenario could gain attraction with prices above 1.11.A sustained break above this key resistance could lead the EUR/USD towards 1.13.

Chart_EUR_USD_Daily_snapshot16.12.15

GBP/USD

We see an upward channel within a primary downward channel. While the primary trend is downwards, the pound sterling formatted a recent upward channel, which is still intact this morning. If GBP breaks below 1.5020 and further 1.50, we expect the pair to decline towards lower targets at 1.49 and 1.4850. Based on the recent upward channel, it is also possible that sterling rebounds, heading for 1.5130 and 1.5290.

Chart_GBP_USD_Daily_snapshot16.12.15

 

Everything will depend on the Fed. So,we will wait and see. We wish all traders profitable trades for today.

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Will U.S. Consumer Prices Spur Dollar Bulls?

Dear Traders,

The U.S. dollar weakened against the euro on speculation the greenback could be vulnerable to a post-Fed selloff. Investors are either taking profits before year-end or adjusting their positions ahead of the big event tomorrow. The Fed is widely expected to increase its benchmark but the focus will be on the overall monetary policy path following a first hike. The British Pound, however, was forced to test its 1.5110-support before it followed the current upward trend.

Today’s focus will be on Consumer Price Reports from the U.S.and U.K. As recently noticed, the market only shows a strong reaction when reports are falling short of expectations. We will therefore be looking for any surprises in CPI figures. Moreover, the German and Eurozone ZEW Survey is scheduled for release at 10:00 GMT.

9:30 UK CPI

10:00 EUR German & Eurozone ZEW Index

13:30 USA CPI

Here is where we see short-term resistances and supports:

  Resistances Supports
EUR/USD 1.1040

1.1060

1.11

 

1.0965

1.0935

1.09

 

  Resistances Supports
GBP/USD 1.5187

1.52

1.5260

1.5110

1.5075

1.5045

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Next Targets To Watch Out For

Dear Traders,

While the British Pound continued to weaken against the U.S. dollar, the euro tested the 1.08-barrier which lends a short-term support for the currency pair. The big question ahead the FOMC meeting next week is whether the euro will remain comfortable above this zone or will rapidly fall back towards 1.05. A Federal Reserve interest rate hike is priced into the market, which is why we expect downward pressure to be limited in the coming days. However, the odds are in favour of the USD and we will be looking for lower targets at 1.0750 in the EUR/USD and 1.5020/00 in the GBP/USD.

EUR/USD: Breaking below 1.0730 may prompt the EUR/USD for a test of 1.07/1.0690. Current resistances are seen at 1.0860 and 1.09. Euro bulls should be looking for a sustained break above 1.09 targeting higher levels at 1.0940.

GBP/USD: GBP is trending downwards but where could be a next stop? We consider the 1.50-mark as a crucial support for the pair. Once this level is breached to the downside, the next stop could be at 1.4950 and 1.4920. On the upper side, the 1.5080-level may act as a resistance for sterling. Above 1.51 a bullish target could be at 1.5150.

Important data for today which could impact on the currency pairs:

9:30 UK Industrial & Manufacturing Production

10:00 EUR Eurozone GDP

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Rebound for the U.S. Dollar?

Dear Traders,

Last Friday the markets tended to lack direction and did not provide attractive opportunities to invest profitably. The U.S. Non-Farm Payrolls report showed a stronger-than expected job growth of 211k with a steady unemployment rate. Average hourly earnings were in line with expectations and showed a slightly lower rise. All in all, payrolls data supported the view that the U.S. economy can withstand a rate increase by the Federal Reserve. The reactions of the market, however, have been very modest. It could be observed that market reactions to incoming data have been fundamentally changed showing that as long as there are no major surprises, the market does not react anymore.

What is important for the week ahead?

The most relevant reports and events are scheduled for release towards the end of this week. On Thursday we will have the Bank of England’s Rate Decision and a speech by BoE Governor Carney. The U.S. Retail Sales report will be the most important piece of data from the U.S., due for release on Friday. From the Eurozone we have the Gross Domestic Product figures, scheduled for release on Tuesday.

There are no important reports scheduled for release today, but sterling traders should pay attention to a speech by BoE Governor Carney at 15:00 GMT. In short-term time frames, GBP would need to break below the current support at 1.5080 and further 1.5050 in order to reinvigorate bearish momentum. A current resistance is seen at 1.5150.

EUR/USD

Bearish Bias: Technically the currency pair is tending towards a break of the 1.0850-level. Based on the descending triangle, we will focus on a break of the 1.0850/30 area in order to sell the pair towards lower levels. Lower targets could be at 1.0790 and 1.0750. Resistances are seen at 1.09 and 1.0950.

Chart_EUR_USD_Hourly_snapshot7.12.15

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Will Yellen Help Strengthen The Dollar?

Dear Traders,

The euro traded higher against the U.S. dollar on stronger Eurozone data, but gains were capped at around 1.0640, the euro’s current resistance zone. The British pound climbed towards 1.5130 but could not hold onto its gains and slipped back to 1.5050. Bank of England Governor Carney did not reveal new signals on monetary policy in his speech yesterday, a reason why the pound lacked direction.

Today’s focus will be on the ADP report and on the speeches of Fed Chair Janet Yellen. The ADP report, which is scheduled for release at 13:15 GMT, is expected to show a slight uptick in job growth. Yellen is due to speak at 13:30 GMT and 17:25 GMT. Dollar bulls are likely to position for a hawkish confirmation, pushing the dollar towards higher levels.

Before this, the U.K. Construction PMI, scheduled for release at 9:30 GMT and Eurozone Consumer Prices, due for release at 10:00 GMT, could have an impact on the GBP’s and euro’s price action.

GBP/USD

Traders should pay attention to the resistance and support levels of the cable’s current trading range. Breaking above 1.5140, sterling could be headed for a test of 1.5190. A significant break of 1.5030, however, may reinvigorate bearish momentum towards 1.50 and 1.4950.

Chart_GBP_USD_4Hours_snapshot2.12.15

EUR/USD

We generally expect the euro to trade lower in the near-term. However, if the euro breaks above 1.0640, it could head for 1.0667 – the resistance line. As bullish momentum could be limited, traders should be cautions with any buy attempts.

Chart_EUR_USD_Hourly_snapshot2.12.15

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Euro In A Waiting Mode – Cable Found Support At 1.50

Dear Traders,

The recent decline in the British pound came to a temporary halt after a short dip below the 1.50-level. As we noted in yesterday’s analysis, the 1.50-level will be important to watch this week and as long as this support remains intact, sterling bulls may push GBP for a test of 1.5130/50.

The EUR/USD appears to be in a waiting mode ahead of the ECB policy decision and there was only little consistency in the euro’s performance yesterday. The 1.06-mark acts as a current resistance for the currency pair. With a break above 1.0620, the focus will turn to higher targets at 1.0640 and 1.0660. Nevertheless, the euro is likely to favor a bearish stance going into Thursday’s big event.

What will be important today?

The German employment report is due for release at 8:55 GMT, but the impact on the euro could be limited as the market is focused on the ECB. Sterling traders should pay attention to the speech of BoE Governor Mark Carney, who is due to speak at 9:00 GMT. Despite a healthy growth of the U.K. economy, BoE officials have highlighted concerns about parts of the U.K. financial system. Carney’s comments could therefore have a significant impact on the GBP’s further direction.

The U.S. ISM Manufacturing Index is scheduled for release at 15:00 GMT. Any positive surprises are likely to reinforce dollar buying.

Daily Forex signals:

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2015 Maimar-FX.

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