Dollar Bulls Need More Signals To Reinvigorate The Long-Dollar Trade

Dear Traders,

After investors have been scared out of their long-dollar positions ahead of Friday’s U.S. job report, they must now reconsider the timing of interest-rate hikes this year. The latest non-farm payrolls report raised doubts about recent speculations the Federal Reserve could be inclined to forgo future rate increases in 2016. While payrolls increased by only 151K last month, the jobless rate fell to 4.9 percent, which was the lowest level since February 2008. In addition, wage growth showed a higher reading, which was reason enough for dollar bulls to send the greenback higher. Nonetheless, it was not easy for traders to handle the sharp fluctuations when job numbers were due for release. Consequently, those who have made a trading break on Friday have made the best choice.

What is important for the this week?

Apart from Fed-Chair Janet Yellen’s testimony on Wednesday and Eurozone GDP-reports and U.S. Retail Sales on Friday the economic calendar is light. Yellen appears before the House Financial Services Committee to testify on economy and monetary policy and market participants will look for an unambiguous confirmation of the future outlook, whether the Fed will grow less hawkish or maintain an optimistic stance, pointing to further tightening in 2016. The dollar’s performance could therefore hinge on Wednesday’s testimony.

The GBP/USD seesawed Friday but ended the week below 1.45. Our focus will be on the 1.4350-level, which may act as a support for the currency pair. A significant break below that level could send sterling back towards 1.4240 and 1.4150. However, remaining above 1.44, we might see the pound rallying towards 1.46 and 1.47, albeit we assume that the 1.47-mark could be a strong resistance. There are no major economic U.K. data reports until Wednesday when Industrial and Manufacturing Production is scheduled for release.

The EUR/USD is currently trending downwards. We expect the 1.1070-level to lend a short-term support for the pair. If this support proves to be correct, we may see a small rebound towards 1.1150 and 1.1180. This scenario would then format a head-shoulders pattern, which could be in play as soon as the euro breaks below 1.1070, reinforcing strong bearish momentum.

Chart_EUR_USD_4Hours_snapshot8.2.16

We wish you a good start to the week and many profitable trades.

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

www.maimar.co

 

 

 

Will U.S. Payrolls Trigger A Second Round Of Dollar Weakness?

Dear Traders,

Choppy fluctuations in the GBP/USD Thursday left much to be desired for traders. Any upward movements were oriented towards the rising trend-line, limiting further gains in the currency pair. The short-lived downward move during the release of the Bank of England’s inflation report also failed to show sustained momentum. In the light of the latest inflation forecast the outlook has become cloudy, at least until 2018. The Bank of England cut its inflation forecast once again, while the Monetary Policy Committee voted 9-0 to keep rates on hold. The MPC reflected the possibility of greater persistence of low inflation in the near-term, while the forecast shows inflation will rise in two years.

In a nutshell, the bearish bias is likely to continue into the second half of 2016 before a trend reversal.

The euro appeared to be unaffected by European Central Bank President Mario Draghi, who said on Thursday that policy makers must not surrender to low inflation and reiterated the ECB’s dovish monetary policy stance. On the contrary, the EUR/USD preferred the upward trend on speculations the Fed will delay tightening policy.

Going into today’s’ highly anticipated Non-Farm Payrolls report, the current weakness of the U.S. dollar is dominating the markets and we are eager to see whether payrolls data will trigger another round of dollar weakness.

The odds are in favor of further dollar weakness as the January U.S. jobs report is forecast to show a smaller expansion, rising only by 190K last month. The focus will also be on Average Hourly Earnings and if payrolls and wage growth surprise to the downside, the USD is in trouble.

As the expectations are very high, trading is very risky at the time when payrolls are due for release. Traders should therefore use a proper risk management in order to avoid disappointments.

Non-Farm Payrolls are scheduled for release at 13:30 GMT.

Have a nice weekend.

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

www.maimar.co

 

 

 

Dollar Weakness To Continue?

Dear Traders,

What a day for the USD! The U.S. dollar depreciated sharply against all of the major currencies as signs of a slowing U.S. economy pushed the 2016 rate-hike likelihood lower. Despite a stronger-than anticipated ADP report, the USD was exposed to strong selling pressure after a report showed U.S. services industries expanded last month at the slowest pace in nearly two years, clouding the economic outlook. In addition, comments from New York Fed President William C. Dudley, who said that the recent financial turmoil “may alter the outlook for growth and the risk to the outlook for growth going forward” set off the dollar’s weakness.

The subsequent rise in the euro and cable was also technical driven as stops were triggered, sending both pairs even higher. The focus now shifts to the Non-Farm Payrolls report due for release tomorrow, which is expected to show fewer than 200K jobs for the first time since September. The payrolls report may determine whether the dollar weakness will continue. In the meantime, let us focus on the technical side:

EUR/USD

The euro rose as high as 1.1145 on the back of broad-based dollar weakness. Depending on tomorrow’s U.S. labor market data, we may see another round of a dollar selloff, which could send the euro towards 1.12 and 1.1280 in a next step. For the time being, we expect the 1.1160-level to act as a current resistance, while downward moves may be limited until 1.10/1.0980. An important support zone is currently seen at 1.0850.

ECB President Mario Draghi is scheduled to speak at 8:00 GMT today, which could have a short-term impact on the EUR/USD.

Chart_EUR_USD_Daily_snapshot4.2.16

GBP/USD

The Bank of England will present its Quarterly Inflation report along with the monetary policy announcement at 12:00 GMT today. While the Monetary Policy Committee is widely expected to keep rates unchanged, BoE Governor Mark Carney may offer some insight when he presents the BoE’s latest economic projections at a press conference 45 minutes later. The expectations are high and traders should be prepared for everything. If the February predictions look bright, predicting inflation would overshoot the BoE’s target over the medium term, the pound sterling could extend its gains versus the greenback. Let’s wait and see.

Taking a look at the 4-hour chart the risk seems to be to the downside. The cable tagged a fresh resistance at 1.4650 and it might be smarter to wait for a significant break above 1.4665/70 in order to buy GBP towards key resistances at 1.47 and 1.48. The direction will hinge on the BoE Inflation report and Carney’s comments but in case of a dovish tilt, we may see the cable sliding back towards 1.4440, 1.4370 and 1.43.

Chart_GBP_USD_4 Hours_snapshot4.2.16

U.S. data such as Initial and Continuing Jobless Claims (13:30 GMT) and Factory Orders (15:00 GMT) may take a back seat.

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

www.maimar.co

 

 

 

Upcoming Breakouts?

Dear Traders,

Not much has happened yesterday. While the euro slightly extended its gains as far as 1.0940, the British pound fluctuated more or less sideways versus the U.S. dollar. The limited fluctuations in both currency pairs did not permit any sustained profit for traders on Tuesday.

Ahead of Bank of England’s Quarterly Inflation Report and monetary policy announcement on Thursday we expect GBP to trade nervous between 1.4470 and 1.4310/1.4290. The Bank of England is forecast to keep interest rates on hold until after Britain’s referendum on EU membership. In the medium term, investors are pessimistic and pushed back their expectations on the timing of a rate hike. The U.K. Services PMI is scheduled for release at 9:30 GMT and may spur the cable for a breakout of its narrow trading range.

GBP/USD

Prices narrowed and formatted a symmetrical triangle this morning. Traders should focus on a breakout above or below that pattern, which may ignite fresh momentum in any direction.

Chart_GBP_USD_Hourly_snapshot3.2.16

EUR/USD

The technical outlook remains unchanged. Based on a symmetrical triangle in the daily chart, we will focus on an upside break of 1.0960 for any bullish and, vice versa, on a downside break of 1.0835 for bearish engagements.

Chart_EUR_USD_Daily_snapshot3.2.16

All eyes will be on ADP numbers and the ISM Non-Manufacturing index. Both reports are expected to show a small pullback in comparison with the previous month but if numbers show a steeper decline, the USD could further weaken.

13:15 USA ADP Employment Change

15:00 USA ISM Non-Manufacturing Composite

(Timezone GMT) 

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

www.maimar.co

 

 

 

Euro and Sterling Rose Against The Greenback

Dear Traders,

The euro and British pound traded higher against the greenback Monday. The best performing currency pair was the cable, which experienced a short squeeze and broke through all recent resistance-levels. A next resistance is seen at 1.4470/75 and if sterling is able to break above that level, we may see a test of 1.45. However, given the uncertainty surrounding the U.K. referendum, which is possible as early as June, the risk is to the downside for GBP/USD. Current support levels are seen at 1.4350, 1.4310, 1.4240 and 1.4180.

The EUR/USD flirted with the 1.09-barrier  but as long as there is no sustained break above 1.0915/25, the euro may drop back towards 1.0840 and 1.0810. On the upper side, the 1.0955/60-level remains in focus and euro-bulls should wait for prices above that level.

Meanwhile, ECB President Draghi reiterated the ECB’s plan to review its stimulus program in March and thus confirmed its dovish tilt. The euro is therefore more vulnerable to losses going into the next monetary policy meeting in March.

The German Unemployment report is scheduled for release at 8:55 GMT which could have a short-term impact on the euro if numbers surprise to the upside.

Sterling traders should keep an eye on the U.K. Construction PMI, due for release at 9:30 GMT.

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

www.maimar.co