Price Overshoot

The selloff in the U.S. dollar gained momentum Tuesday and led to overshooting prices in other counterparts. The British pound surged to a high of 1.2029 despite a deeply overbought situation. The euro, however refrained from testing the 1.05-level after breaking above 1.0370. Nonetheless, we saw sharp corrections in both pairs following price peaks.

We were able to catch some good profits in the midst of yesterday’s bullish momentum.

GBP/USD

Below 1.19 we expect a steeper correction towards 1.16. However, given the market’s speculation about a dovish sentiment (despite continued warnings that inflation is too high!) we may experience some extended dollar weakness. Today, U.K. inflation will be released, so let’s see what is in store for sterling traders.

Our trading ideas for today 16/11/22:

EUR/USD

Long @ 1.0410

Short @ 1.0360

GBP/USD

Long @ 1.1910

Short @ 1.1830

DAX® (GER40)

Long @ 14370

Short @ 14320

Settings for all trades today: Entries from 8:00 am UTC, SL 25,

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.