U.S. Inflation Print To Impact The Dollar’s Price Action

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Dear Traders,

We got what we were looking for in the GBP/USD: A breakout of the cable’s narrow trading range even though that breakout has proved not as strong as we had hoped for. Sterling bulls attempted to push the pound above 1.39 but bullish momentum was somewhat muted following the U.K. January inflation print which came in at 3 percent, better than the 2.9 percent forecast ahead of the release. Overall, rising prices and economic fundamentals create conditions for a stronger currency even if Brexit risks are the main concern for investors.

Technically speaking, we now expect the GBP/USD to trade with a slight upward tilt heading towards 1.3970/80. If the pound is able to take out the 1.40-hurdle again, we will focus on higher targets around 1.4160. A current support is seen around 1.3740.

The EUR/USD broke above 1.2340 and is currently heading towards 1.24. If it breaks significantly above 1.2410, we may see another leg up towards 1.2470. As long as 1.23 holds, chances are in favor of the bulls. Euro bears should better wait for prices below 1.2280.

Today’s focus turns to the U.S. inflation figures due at 13:30 UTC. The U.S. Consumer price index probably increased at a moderate pace in January. Investors will pay particular attention to that report, which is why potential surprises in the inflation print could have a significant impact on the dollar.

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High Volatility Led To Unsteady Currency Movements

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Dear Traders,

The Bank of England surprised investors with a hawkish twist yesterday and warned that rate hikes may be faster and larger than originally anticipated. This hawkish tone caught the market by surprise and led to high volatility and a short squeeze in GBP/USD. While sterling bulls were able to benefit from the rapid surge to a high of 1.4067, the upward move turned out to be only short-lived and traders had to be quick to take the profit.

To sum it up, the BoE lifted its forecasts for economic growth and said interest rates may need to rise at a steeper pace than previously thought. BoE policymakers now see three rate hikes over the course of three years while the market is now pricing in a 70 percent chance of a rate increase in May, up from nearly 50 percent yesterday.

While the BoE’s hawkishness should pave the way for further gains in the pound, it were high volatility and ongoing Brexit uncertainty that prevented the currency from rising further against the U.S. dollar.

We were able to book a good profit yesterday by trading our daily long signal.

The euro ended the day unchanged against the greenback after it dropped to a low of 1.2212. For euro bears, however, the downward move has proved insufficient to provide a sustained profit. Prices in the EUR/USD narrowed, suggesting that we may see some upcoming breakout of that tight range. If the euro climbs above 1.2265 we may get another test and potential break of 1.2295. A higher target could then be at 1.2330. If the euro, however, falls below 1.2240 it could further decline towards 1.22. A lower target could then be at 1.2150.

There are no major economic reports scheduled for release today. U.K. Manufacturing Production is the only second-tier report scheduled for release at 9:30 UTC.

Have a nice weekend.

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BoE Super Thursday To Provide Trading Opportunity For Sterling Traders

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Dear Traders,

It’s Super Thursday at the Bank of England, which means we get a rate decision along with the Quarterly Inflation Report and comments from BoE Governor Mark Carney. Today’s meeting is the most important event this week and sterling traders prepare for volatile swings around the monetary policy announcement. The big question among market participants is how hawkish the BoE might be towards the end of this year. The market is fully pricing in a rate increase at the BoE’s Super Thursday in November while market participants see a 50/50 chance of an earlier rate hike in May. If evidence points to a rate rise in May, the pound will rally and may find its way back to 1.42. However, if the tone in today’s statement is not as hawkish as traders are hoping, the pound will fall.

The focus will also be on the inflation report and if economic growth and inflation forecasts are revised higher, GBP/USD could recover some of its recent losses.

There is also the possibility of a muted response following today’s statement. Brexit risks continue to cause uncertainty about the outlook and if those risks have not changed substantially, the market’s reaction to the statement could be muted.

We will know more today at 12:00 UTC.

GBP/USD: The cable found some support around 1.3850 and if this barrier is breached to the downside we expect further losses towards 1.3750. For bullish momentum to accelerate, it would however need a sustained break above 1.40.

EUR/USD: The euro broke out of its recent sideways trend channel and fell towards 1.2240. The break below 1.23 came despite Angela Merkel’s deal with the SPD to form a great coalition in Germany. Technically speaking, the chances are now in favor of further downside potential driving the pair towards 1.2220 and 1.2170. If the euro rises back above 1.2350, bulls may take over control.

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We wish you good trades and many pips!

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FX Market Less Influenced By Equity Selloff And Subsequent Rebound

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Dear Traders,

The Forex market was less influenced by the selloff in equities at the beginning of this week. While the recent crash and subsequent recovery in equities have sparked a wave of volatility in global markets, the moves in forex have been more conservative.

The EUR/USD remained resilient and ended the trading day virtually unchanged after bouncing off near the 1.2310/00-support level. As long as the euro trades between 1.25 and 1.23 there is nothing new to report.

The GBP/USD dropped amid heightened volatility towards 1.3830 from where a relief rally started, erasing earlier losses with a rebound towards 1.40. At the end of the day, the pound ended the trading unchanged against the dollar. Traders should now prepare for larger swings with Brexit talks and Super Thursday looming.

GBP/USD

Looking at the daily chart we see that bearish momentum is fading after the pound stopped its fall above 1.3830. While we expected lower targets to be at 1.3830 and 1.38, we now prepare for potential pullbacks. If the pound climbs back above 1.40 and is able to stabilize above that threshold, we anticipate further bullish momentum towards 1.42 and possibly even a break above 1.43. That bullish scenario is however not a foregone conclusion as sellers may re-emerge.

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We wish you good trades and many pips!

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Greenback Continues Recovery But Today It’s Turn-Around Tuesday

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Dear Traders,

The U.S. dollar continued its recovery against all major currency pairs and thus, pairs like EUR/USD and GBP/USD trended lower at the start of this week. While short traders were able to book a profit yesterday we recommend a cautious approach when expecting further bearish momentum. On so-called ‘turn-around Tuesdays’ there is a risk that we may see some pullback following Monday’s decline.

GBP/USD: The cable broke below the psychological level of 1.40 and, as mentioned in our yesterday’s analysis, chances could be in favor of the bears now. A next lower target could be around the 1.39-barrier and if 1.39 breaks, the pound may drift lower towards 1.3830/00.

For bullish momentum to accelerate, the pound would need to climb back above 1.4030.

As for the EUR/USD, we still see the pair trading within its recent sideways trading range while remaining above 1.2335. As long as 1.23 holds, we anticipate pullbacks towards 1.2430/40. Higher resistances are seen at 1.2480 and 1.2540. If the euro, however, falls below 1.2290, we expect further losses towards 1.22.

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We wish you good trades and many pips!

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U.S. Dollar Weaker Ahead Of NFPs

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Dear Traders,

The best performing currency pair on Thursday was the EUR/USD, which took another glimpse above 1.25 but was yet unable to hold that level. Our yesterday’s long signal has proved profitable while euro bulls lie in wait for a next leg up, targeting at 1.27. The question whether the single currency could be vulnerable to further gains will mainly depend on the demand for dollars following today’s U.S. labor market data.

One reason for the euro’s surge were reports that some ECB policymakers are pushing President Mario Draghi to give investors clearer guidance on when rates might rise. In a nutshell, these rumors confirm that the ECB is comfortable with the euro’s appreciation.

The most prominent event risk on the last trading day of this week will be the January Non-Farm Payrolls at 13:30 UTC and if payrolls exceed expectations combined with an uptick in wage growth we could see the dollar recovering some of its recent losses. However, traders should bear in mind that given the dollar’s strong downtrend, market participants might be inclined to sell USD at higher levels.

Recently, the release of the monthly NFP report failed to generate extreme volatility in the market, which is why traders now brace for a more muted market reaction. Whatever the case, we will prepare for both bullish and bearish scenarios.

EUR/USD

The current uptrend channel is still intact and after the euro refrained from falling below 1.2385 the chances are in favor of further bullish momentum, driving the pair towards 1.2650 and possibly 1.27.

GBP/USD: There has been no significant correction in the recent performance of the cable with the pair following a clear uptrend. How the cable will trade within the next hours will however depend on the outcome of the payrolls. If the pound finds its way above 1.43 we focus on higher targets at 1.4380 and 1.4450. For bearish momentum to accelerate, the pound would first need to fall below 1.4220 and further 1.4185.

Have 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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USD Unfazed By FOMC Meeting

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Dear Traders,

There was little consistency in the performance of the U.S. dollar following the FOMC meeting. As expected, there was no policy change, so the market is now pricing in a nearly 100 percent chance of a next rate hike in March. The greenback ended the trading day virtually unchanged against the euro and British pound.

As recommended for subscribers, we did not trade yesterday since we secured our monthly profits. Thus, we did not lose any pips of our monthly performance.

EUR/USD: The pair traded recently sideways between 1.2475 and 1.2385. For euro bulls we recommend waiting for a sustained break above 1.25 in order to participate in the euro’s uptrend. If the euro, however, falls back below 1.24 we may get a retest of 1.2350/30.

GBP/USD: The cable traded with a tailwind and climbed above 1.42. That break was however not sustained, at least until now. If the pound takes out the 1.4235-barrier we may see a run for 1.4285. Sterling bears might wait for a sustained break below 1.41.

Interesting economic reports today:

9:30 UK PMI Manufacturing

15:00 USA ISM Manufacturing

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We wish you good trades and many pips!

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U.S. Dollar Continues Slide After Trump State Of The Union Speech

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Dear Traders,

Turn-around Tuesday lived up to its name and we got what we were looking for: A reversal of the dollar’s short-lived recovery and a very good daily and monthly profit. The U.S. dollar is being sucked into the maelstrom triggered by the ‘America First’ agenda of the Trump administration. As for the depreciation of the greenback and the long-term outlook, we can point out that the protectionism move will negatively influence the world’s largest economy.

The dollar extended its slide after U.S. President Trump’s State of the Union speech. As expected, Trump sought to strike a positive tone and described a “New American Moment” of wealth and opportunity. Trump called on Congress to pass a 1.5 trillion infrastructure-spending plan but this campaign promise was widely expected by the markets. Thus, the dollar’s reaction to his speech was muted.

EUR/USD

The euro recovered some of its losses after the 1.2330-support proved intact. Now that the single currency has stabilized above 1.24 we could see another test of 1.2450, a short-term resistance in the EUR/USD. If the euro finds its way above 1.2460 we expect further gains towards 1.25 and possibly even 1.2650.

The British pound started a relief rally after the psychological support at 1.40 has been tested. If the pound climbs above 1.4210 we may see a rise towards 1.43 but this depends on the risk appetite and demand for dollars ahead of the FOMC decision.

The next upcoming risk event will be the FOMC rate decision at 19:00 UTC but no changes are expected. It will be Janet Yellen’s last FOMC meeting before her term ends in February.

Before coming to the FOMC decision, we will keep an eye on the Eurozone Consumer Price report, due at 10:00 UTC, followed by the ADP report at 13:15 UTC.

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We wish you good trades and many pips!

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USD Receives Boost But Uptrend In EUR And GBP Remains Intact

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Dear Traders,

We finally saw some reversal in the FX market after consecutive days of strength in both euro and pound. The U.S. dollar received a boost from encouraging comments from U.S. President Trump, who used the ‘strong dollar’ language in order to soften previous comments from U.S. Treasury Secretary Mnuchin who seemed to avoid the strong dollar policy. The sharp reversal happened after euro and pound have surged to new highs.

The euro took out the 1.25-barrier and rose to a high of 1.2537 on the back of the Eurozone’s improving outlook. ECB President Draghi declined to say that the euro was too strong while his comments on growth were relatively bullish. He said that the euro’s strength was in part down to the regions improving outlook. In short, Draghi’s commentary was not enough to trigger a reversal in the euro’s uptrend. Thus, euro traders should generally expect further euro strength, anticipating higher targets in the EUR/USD at 1.2560 and 1.27.

The British pound was able to extend its gains towards 1.4350 before a sharp reversal occurred, sending the cable back below 1.42.

Today, traders will pay attention to the U.S. and U.K. 4Q GDP figures, which could affect the price action in both EUR/USD and GBP/USD. We will watch the release of the U.K. GDP at 9:30 UTC. The U.S. GDP is scheduled for release at 13:30 UTC.

We wish you good trades and a nice 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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The Euro’s Fate Is In Draghi’s Hands

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Dear Traders,

What a trading day! The U.S. dollar extended its slide against other major currencies on the back of protectionism while the pound’s rally intensified the uptrend in GBP/USD.

Moreover, comments from U.S. Treasury Secretary Steve Mnuchin steepened the dollar’s dive. He said that” obviously a weaker dollar is good for us as it relates to trade and opportunities”, a departure from America’s traditional strong dollar policy.

Our yesterday’s long entry in the GBP/USD has proved highly profitable even though we have been on the lookout for corrections. Despite the cable’s strong uptrend which could persist over the medium-term, we may see some pullback tomorrow when both U.K. and U.S. GDP reports are due for release.

GBP/USD

The pair jumped to the highest level since June 23, 2016 – the day of the Brexit referendum. The reasons for the strong rally lie not only in the weakening dollar but also in good U.K. data and the progress in Brexit talks. On a weekly basis we got a bullish breakout suggesting that there could be accelerated bullish momentum on the way towards 1.46 – the next crucial resistance zone. As long as the pound remains above 1.40, the overall outlook remains constructive.

While the biggest story was the pound’s strong rise, the performance of the euro was not bad either. The euro broke above 1.2350 and headed towards 1.2450 ahead of the ECB meeting. Whether the euro can hold onto its high levels or can even extend its rally, will hinge on the rhetoric of Mr. Draghi at the ECB press conference at 13:30 UTC.

If ECB President Mario Draghi joins the chorus of policymakers speaking against the euro’s strength, the euro could quickly give up some of its gains. However, the devil is in the details and if Draghi fails to convince the market of the ECB’s concerns about the currency’s strength, the euro could further rise.

EUR/USD

We prepare for higher volatility today and expect larger market swings. On the topside, we will now focus on the 1.2460-barrier, which could act as a short-term resistance. For bearish momentum to accelerate, it would need a break below 1.23 and further 1.22. As long as the euro remains above 1.23 chances are in favor of the bulls.

Daily Forex Signals:

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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 2018 Maimar-FX.

www.maimar.co