Pound Is Flying High, Next Targets To Watch Out For

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Dear Traders,

The British pound extended its gains and jumped higher towards the next hurdle around 1.35-1.3515. Traders who traded the bullish movement yesterday had, however, to struggle with limited upside swings and short-term corrections before the pound was ready for another leg higher. Reportedly, Dublin and London are close to an agreement on the Irish border which will allow Brexit talks to move forward. The Irish border is a main obstacle in separation talks. The latest progress in the divorce talks has thus pushed the pound to fresh highs.

Given the strong rally we anticipate further gains in the GBP/USD. Next higher targets could be at 1.3515 followed by 1.3570. On the bottom side, it would require a renewed break below 1.3250 to reinvigorate bearish momentum.

The EUR/USD found some support near 1.1820 from where a reversal started. As noted in yesterday’s analysis, as long as the euro remains well above 1.18, we favor a bullish bias anticipating higher targets at 1.19 and 1.20. If the euro falls however below 1.1830 and further 1.18, we could see bears taking over.

Euro traders should keep an eye on the Eurozone Consumer Price Index, scheduled for release at 10:00, which could lead to some upside swings in the EUR/USD. From the U.S. we have the PCE deflator scheduled for release at 13:30 UTC which is the Fed’s favored inflation measure.

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Pound Jumps On Brexit Hopes

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Dear Traders,

Many wondered yesterday what happened to the pound as it jumped more than 150 pips after falling to a weekly low of 1.3220. The high volatility was triggered by reports that the U.K. and E.U. have agreed a deal over the U.K.’s Brexit divorce bill, achieving a breakthrough in Brexit talks. The pound experienced high volatile swings in the wake of these reports and, unfortunately, some of our yesterday’s trades became victims of high volatility.

The GBP/USD could now head for a test of the 1.34-threshold and if the 1.3450-level is breached on the upside we could see sterling rallying towards 1.36. As for the bears, the bearish momentum came to an abrupt end yesterday and it will be difficult to only focus on the technical picture as the pound is mainly affected by Brexit talks.

The EUR/USD traded lower and that bearish bias can be attributed primarily to the demand for U.S. dollars. The Senate tax cut proposal advanced out of committee and toward a floor vote. With the tax reform moving closer towards realization we expect the greenback to receive a further boost. Ongoing concerns about North Korea however, seem to play a minor role for the dollar.

EUR/USD

The single currency faces a crucial support around 1.18 and if this barrier gives way to fresh bearish momentum we could see the euro falling back towards 1.1720. If 1.18 however holds, we anticipate a potential run for 1.20.

What will be important today?

The German Consumer Price Index will be release at 13:00 UTC but this report is not expected to have a major impact on the euro. From the U.S. we have revisions to the third quarter GDP scheduled for release at 13:30 UTC followed by Yellen’s appearance before the Congress at 15:00 UTC.

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EUR/USD Approaches 1.1860, Next Target At 1.1905?

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Dear Traders,

As expected, there was little movement in the Forex market with U.S. markets closed for the Thanksgiving holiday. These quiet conditions may continue today which is why we advise traders not to expect too much from the market and better stay out of new engagements or take profits at smaller targets.

EUR/USD: The euro traded with a tailwind and rose towards 1.1860. Once that level is breached we may see the euro extending its gains towards 1.1895. We bear in mind that the next crucial resistance level comes in around 1.1905. As long as the pair remains above 1.1770 the near-term bias is considered slightly bullish.

GBP/USD: The cable rejected the 1.3340-barrier and dropped back below 1.33. We now expect a near-term support to come in near 1.3265 from where we may see some leg up. Once the cable breaks above 1.3340 we anticipate further gains towards 1.3370 and possibly even 1.34. However, we recommend taking a cautious approach to markets that are illiquid.

Have a nice weekend!

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Euro And Pound Soar Amid Low Liquidity

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Dear Traders,

The euro and pound sterling have soared to fresh highs amid low trading volumes. The upward movement in both EUR/USD and GBP/USD was not only driven by low liquidity but also by a weakening U.S. dollar. While trading volume was low with most U.S. market participants being offline for the long holiday weekend, we saw some remarkable movement Wednesday providing us profitable trades. There was some dovish tilt in the Fed minutes which contributed to the dollar’s weakness. While a rate increase in December is almost certain, there was some concern that price pressures would fall short of the Fed’s inflation target for longer. Those remarks cooled rate hike expectations for 2018 and drove the dollar lower in turn.

The EUR/USD broke out of its recent downtrend channel and rose towards 1.1840. Whether we will see a follow-through of the recent upward trend remains to be seen but should be viewed with a critical eye. We expect a next resistance to come in at 1.1880, provided that the euro breaks the 1.1840-barrier significantly. However, given the quiet trading conditions we recommend not expecting too much. A current support is seen at 1.1750.

The GBP/USD headed towards the 1.3340-threshold and it will be interesting now whether the cable is able to break the 1.3350-level significantly or bounces back from its highs. Above 1.3360 we expect accelerated bullish momentum towards 1.34 and 1.3450. A near-term support is however seen at 1.3250.

The U.K. GDP report is due for release at 9:30 UTC and could have a major impact on the pound provided that changes are made to the revisions.

Most action is expected to take place during the European trading hours while trading should be quieter afterwards. Happy Thanksgiving to all of our U.S. traders!

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We wish you good trades and many pips!

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EUR/USD Remains Below 1.18, GBP/USD Faces 1.33

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Dear Traders,

The euro ended the trading day virtually unchanged against the U.S. dollar after a bullish reversal towards 1.18 has proved short-lived. We now expect the EUR/USD to trade lower towards 1.1680 unless we see a sustained break above 1.18 and farther 1.1840, which would shift the bias in favor of the bulls.

The GBP/USD followed its short-term upward trend channel (see yesterday’s analysis) and rose to a high of 1.3280. If the cable is able to hold above 1.32 we expect further gains towards 1.3310 and possibly even 1.3325. But irrespective of the technical outlook, any new Brexit headlines or speculation about the Brexit progress will affect the cable’s price action in the near-term.

Sterling traders should keep an eye on the Bank of England testimony at 10:00 UTC. Several BoE officials are scheduled to testify before Parliament and if there are indications of further monetary policy normalization in 2018, the pound could soar.

Federal Reserve Chair Janet Yellen is scheduled to speak later today at 23:00 UTC but her comments may have little impact on the greenback’s price action as she announced her retirement from the Fed in February after Jerome Powell has been sworn into office.

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USD Weakness Sends EUR And GBP Soaring

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Dear Traders,

While the House passed its version of tax bill Thursday, the U.S. dollar was little impressed and plunged during the Asian session amid low trading volumes.

The EUR/USD traded higher in the early European trading hours and we now focus on the 1.1850-barrier, which could prove crucial in terms of further bullish momentum. If the euro is able to stabilize above 1.1850, the next target is 1.1905. Sellers should, however, wait for a break below 1.1720 in order to sell euros towards 1.1670 and 1.1580.

Most attention will be paid to a speech of ECB President Mario Draghi today at 8:30 UTC, which could affect the euro’s price action.

The British pound soared on new Brexit optimism. After the U.K. has shown a “willingness to conclude a positive outcome” according to German MEP Manfred Weber, the EU is growing more confident that the current Brexit impasse will be broken and that exit talks will progress. While there might be some room for further gains in the GBP/USD, we bear in mind that as long the pair remains range-bound between 1.3340 and 1.30 there is no directional bias.

We wish you a nice weekend.

Additional daily and long-term entries are available for subscribers.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2017 Maimar-FX.

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The Dollar’s Fate Is In The Hands Of The U.S. Tax Reform Bill

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Dear Traders,

U.S. inflation data, at the end of the day, did not have a major impact on the U.S. dollar with the greenback ending the trading day virtually unchanged against the euro and British pound. The EUR/USD soared to a high of 1.1860 before it fell back below 1.18. Our assumption of a slight extension of gains in the EUR/USD has proved correct but the sharp intraday reversal could cause euro bulls to run out of breath now. While the 1.1910-Level remains a crucial resistance on the topside, the euro could now struggle to overcome the 1.1805-hurdle. If the single currency is able to stabilize above 1.18 we may see a run for 1.19 but with bullish momentum running out of steam the euro may head for 1.1730.

Euro traders should keep an eye on the Eurozone Consumer Price report due at 10:00 UTC, which could have a minor impact on the euro’s price action.

The current price action in the GBP/USD frays the nerves of day traders. The pair trades without any discernable direction and for traders looking to assign a directional approach, we recommend waiting for price breakouts either above 1.3270 and 1.3350 or below 1.31 and 1.3020.

Sterling traders should pay attention to a round of Bank of England speakers including BoE Governor Carney who is scheduled to speak at 14:00 UTC.

Apart from market-moving topics like Brexit and monetary policy, the fate of the U.S. dollar is in the hands of the U.S. tax reform. Today, the House will vote on its tax-overhaul bill, aiming to take the most concrete step toward overhauling the American tax system. House Republicans aim to get the tax reform done by year-end and that is exactly what dollar bulls want to see. How the dollar will trade in the near-term could therefore hinge on the outcome of today’s vote.

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Monetary Policy Speak And U.K. CPI Data Could Boost Risk Appetite

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Dear Traders,

The price trend in both GBP/USD and EUR/USD remains disappointing overall. The price of the euro has barely changed with the currency pair still oscillating around 1.1670. The British pound found some halt near 1.3060 and ended the trading day above 1.31.

The lethargic market situation might soon come to an end as market participants brace for higher volatility ahead of today’s upcoming high-profile event. The Heads of the European Central Bank, Federal Reserve and Bank of England are scheduled to speak on a panel in Frankfurt at 10:00 UTC. Chances are slim that policymakers will reveal anything new that the market does not already know but traders should prepare for heightened volatility around this event. If none of today’s speakers touches on monetary policy, the round table discussion will be a non-event for traders.

Shortly before that, sterling traders will pay close attention to the U.K. Consumer Price Report at 9:30 UTC. If inflation data beats expectations the pound could soar towards 1.32 and 1.3250. On the bottom side we will wait for a break below 1.3020 and more importantly 1.30.

EUR/USD

In short-term time frames the euro seems to be primed for an upside breakout. If the price climbs above 1.1680 we may see some bullish continuation towards 1.1715/25. For bearish momentum to accelerate the single currency must significantly drop below 1.1640.

 

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We wish you good trades and many pips!

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USD Dips On Concerns Over Tax Cut

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Dear Traders,

We finally saw larger market swings Thursday with the EUR/USD finding directional bias toward the North.

The catalyst for the weakening USD was news the U.S. Senate would delay tax cuts to the corporate rate until 2019 and while a delay is not what dollar bulls want to hear right now, they sold dollars on the news.

EUR/USD: We got the price breakout we were looking for in yesterday’s technical analysis. After the break above 1.1605 the euro gained ground against the dollar and rose towards 1.1655. If the euro breaks above 1.1660 we may see a run for 1.1685 and possibly the crucial resistance zone of 1.17-1.1730. On the bottom side, we focus on dips below 1.1570 and 1.1550, that could reinvigorate fresh bearish momentum.

GBP/USD: The price action in the cable remains messy. As long as there is no directional bias, traders may have to struggle with false breakouts. We are still looking for profitable price breakouts either above 1.3165 or below 1.3090.

U.K. Manufacturing Production figures are scheduled for release at 9:30 UTC and could have a minor impact on the pound.

From the U.S. we have the University of Michigan Consumer Sentiment due for release at 15:00 UTC but this report is not expected to have a major impact on the dollar.

We wish you good trades and a beautiful weekend.

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

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Forex Market Remains Subdued

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Dear Traders,

The price action in both EUR/USD and GBP/USD remains subdued amid the lack of market-moving economic reports and risk events throughout this week.

EUR/USD: The euro stabilized above the 1.1550-level and appears to be headed for another test of the 1.1615-resistance. If the 1.1615/20-barrier gives way to fresh bullish momentum we may see the euro rising towards 1.1650/60. For bearish momentum to accelerate it would need a sustained break below 1.1520.

GBP/USD: The cable traded with a tailwind after it rejected the 1.31-support. We now focus on a potential trading range between 1.3220 and 1.3130. Sterling bulls could benefit from price breakouts above 1.3180 while bears should wait for prices below 1.3130 in order to sell sterling towards 1.31 and 1.3070.

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co