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Bearish Bias On GBP/USD And EUR/USD

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Dear Traders,

Uncertainty and potential risks in the event of a Brexit overshadowed the financial markets Monday and triggered a sharp sell-off in the British pound. Rating companies warned that a U.K. exit from the European Union would hurt business confidence and affect investment negatively. As a result, sterling fell to its lowest level in almost seven years, touching a fresh low at 1.4057. Traders are now wondering how low can GBP go and since we know about the sustainability of sterling’s trends and its ability to fall several consecutive trading days without a major correction, we expect further losses towards 1.40, 1.3960 and 1.39. We bear in mind that, for the time being, the 1.40-level could act as psychological barrier before heading towards record lows at 1.36. A next lower target could be at 1.4020, whereas current resistances are seen at 1.4250 and 1.43.

The next event risk for the pound will be Bank of England Governor Carney’s testimony scheduled at 10:00 GMT today. Carney testifies to lawmakers about the outlook for the U.K. economy and monetary policy and given the BoE’s latest inflation and growth projections, the odds favor further downside momentum.

The euro finally broke below 1.1070 and fell all the way down towards the 1.10-barrier, which has led a current support for the EUR/USD. We expect bearish potential to continue in the near-term, sending the currency pair towards 1.0970 and 1.0920. On the upside, previous support-areas at 1.1070 and 1.11 could now act as resistances.

The German IFO Survey is scheduled for release at 9:00 GMT and could have an short-term impact on the euro.

From the U.S. we will have Consumer Confidence scheduled for release at 15:00 GMT and figures are forecast to show a decline in February which could negatively affect the greenback in short time frames.

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Dollar Weakness To Continue?

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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.

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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 2016 Maimar-FX.

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GBP/USD: Steeper Decline Or Short Squeeze?

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Dear Traders,

Today will be an important day for the British pound and sterling traders seem to be waiting in their starting blocks. The Bank of England will announce its policy decision and release the minutes of its meeting at 12:00 GMT. While the central bank is expected to keep monetary policy unchanged, traders and analysts pushed back their expectations of a BoE liftoff. The market is currently pricing in a very dovish BoE tightening cycle, not expecting the central bank to raise rates until well into 2017. These speculations are manifested in the pound’s sustained downtrend. But we have learned from past experience, that any surprises can quickly alter the market’s sentiment which is why investors were caught on the wrong foot sometimes. Some currency traders even stress the idea that sterling’s’ weakness looks considerably overdone. It is worth noting that the depreciation of the British pound should suit policy makers and could have a positive impact on inflation. Any shifts away from the central bank’s dovish monetary policy stance could trigger a strong rebound in the GBP/USD.

However, following the motto “the trend is your friend”, traders should, for the time being, prefer to sell any rallies towards lower targets.

GBP/USD

Taking a look at the weekly chart, it is tempting to focus on a steeper decline, targeting at the 1.40-barrier. But first, we will pay attention to the 1.43-level and GBP will need to break significantly below that level in order to reveal fresh bearish momentum towards the next support at 1.4230. Current resistances are seen at 1.4530, 1.46 and 1.4640.

Chart_GBP_USD_Weekly_snapshot14.1.16

The euro bounce back from its 1.08-support and started a small relief rally against the U.S. dollar. The next hurdle will be at 1.09 and it remains to be seen whether the currency pair will be able to extend gains towards 1.0940 and 1.0980. There are no major important economic reports due for release today. The German GDP report, due for release at 9:00 GMT, may have some impact on the euro. However, the euro remains to trade between 1.10 and 1.08 and as long as there is no breakout above or below these zones, traders will have to wait and focus on the current trading range.

Fed President Bullard is scheduled to speak at 13:30 GMT. At the same time, U.S. Continuing and Initial Jobless Claims are due for release.

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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 2016 Maimar-FX.

www.maimar.co

 

 

 

Another day without Big Moves

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Dear Traders,

And once again it was a trading day without huge market moves and there were no significant break-outs. The cable marked a new resistance at 1.5370, but generally followed its recent upward trend. The euro, on the other hand, remained firmly within its narrow trading range. Nevertheless, traders were able to gain a small profit with our long-entry, even though gains were not as huge as we had hoped for.

Why did the minutes fail to trigger bigger moves?

The Bank of England’s MPC minutes came in less hawkish than expected. BoE policy makers voted 8-1 to keep the benchmark rate at 0.5 percent and signaled to keep rates steady as long as inflation weakness persists. According to the minutes, price growth will probably stay below 1 percent until spring 2016, which is longer than anticipated. Investors had hoped for any signals with regard to an earlier rate hike.

The overall tone of the FOMC minutes was not sufficient enough to spur the U.S. dollar’s momentum. Federal Reserve policy makers delayed an interest rate increase last month because of downside risks to inflation and a further strengthening of the dollar, which could be caused by growing risks from China. However, officials continued to say that they were on track to raise rates later this year. Projections showed that 13 of 17 FOMC members forecast a rate hike by year’s end. Market participants anticipated a more hawkish tone and given the recent slack in the labor market, investors saw little reason in the minutes to expect a Fed rate hike soon.

Today there are no important economic reports scheduled for release. U.K. Trade Balance, scheduled for release at 8:30 GMT and U.S. Wholesale Trade Sales, due at 14:00 GMT are second-tier reports, which could have a limited impact on the currencies.

We wish you a wonderful weekend!

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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 2015 Maimar-FX.

www.maimar.co

 

 

 

Relief Rally ahead of next week’s Fed decision

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Dear Traders,

The Bank of England’s minutes sounded, against all odds, less dovish even though only 1 MPC member voted to raise rates. The pound advanced as a result and broke easily above the 1.54-mark. BoE policymakers said global developments haven’t shaken their conviction that the time for a rate increase is approaching. However, the BoE is likely to wait for the Fed to do the first step and see how the market reacts.

Sterling bulls had several profitable chances to gain profits. Today, traders should keep an eye on the BoE Inflation expectations, scheduled for release at 8:30 GMT. GBP marked a current resistance at 1.5475 and bulls could be looking for prices above that level in order to drive GBP for a test of 1.55.

Euro traders had to be patient and must unfortunately record further losses before the euro finally showed some upward momentum towards $ 1.13. Given the uncertainty going into next week’s Federal Reserve decision, volatility should be on the rise, leading to a possible relief rally towards 1.14 in the EUR/USD.

Important economic data for today:

12:30 USA PPI reports

14:00 USA Michigan Confidence 

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.

Copyright © All Rights Reserved 2015 Maimar-FX.

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FOMC Meeting Minutes

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Dear Traders,

The pound sterling experienced a sharp rise against the greenback after U.K. inflation unexpectedly accelerated in July, indicating that the Bank of England could maintain a more hawkish bias towards the end of the year. Unfortunately our long-entry was skipped due to a price gap at the time when CPI data was released. This can happen sometimes in trading due to high volatility and we can only accept it.

The euro, however, failed to show any major movement yesterday. Investors remained risk-averse ahead of the Federal Reserve minutes today. Market participants are looking for an indication for a rate hike in September.

Despite concern over China’s growth outlook, which could weaken the case for an interest-rate rise this year, forecasts show that most investors still anticipate a liftoff as early as next month. We are looking forward to seeing what the minutes today will show and how the market will react.

FOMC Minutes are due for release at 18:00 GMT. Before that highly anticipated release, traders should watch U.S. Consumer Prices, scheduled for release at 12:30 GMT. This could be a high volatile trading day and we wish everyone many green pips.

EUR/USD

SHS-pattern: Chances are that we will see increasing bearish momentum with a downside break of 1.1010. Lower targets could be at 1.0970, 1.0930 and further 1.0850. However, above 1.11 the U.S. dollar may lose strength, pushing the euro to higher levels such as 1.1145 and 1.1185.

Chart_EUR_USD_4Hours_snapshot19.8.15

 

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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 2015 Maimar-FX.

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U.S. Non-Farm Payrolls

/in /by

Dear Traders,

We got what we were looking for with our short-entry in the GBP/USD, and we took advantage of almost the entire downward move which has ended in a profit of 110 pips. The British pound dropped sharply after the Bank of England’s monetary policy announcement did not satisfy investor’s expectations. Only 1 member of the monetary policy committee voted for a rate hike – investors had been looking for more than 2 hawks and sold-off the pound as a result. Moreover, the BoE lowered its inflation forecast with Governor Mark Carney indicating that “negative inflation wouldn’t be surprising”. The bottom line is, that the central bank is in no rush to change its monetary policy in the near term.

The euro failed to provide any profitable trading chance yesterday, remaining sideways between 1.0935 and 1.0875. Let’s see if we see more momentum coming up with the U.S. labor-market numbers today.

What to expect from today’s Non-Farm Payrolls?

Economists are looking for a healthy job report with payrolls growth exceeding 200K, a steady unemployment rate and Average Hourly Earnings to grow at a steady pace. If one of these conditions will miss, dollar bulls could be disappointed and drive the USD lower. Arguments for weaker payrolls could be the smaller increase in private-sector jobs according to the ADP report on Wednesday. On the other hand, the ISM index rose by a record level, an argument for stronger payroll growth.

Payrolls are due for release at 12:30 GMT.

We wish you a wonderful weekend!

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 2015 Maimar-FX.

www.maimar.co

 

 

Euro stable, GBP may find bottom

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Dear Traders,

The Fed minutes had no significant impact on the U.S. dollar and failed to trigger any major market reaction. While most Federal Reserve officials believe that rates will rise in 2015, the central bank registered concern over Chinese growth pace and Greece. Policy makers saw the U.S. economy moving toward conditions that would justify an interest rate increase, while minutes also signaled a potential risk from China and Greece.

The euro remained stable above $ 1.10. Investors are still optimistic that a deal for Greece could be within reach. This is the last chance for Greece and Prime Alexis Tsipras has until midnight Thursday to present European leaders with a detailed economic reform plan in exchange for a new bailout. Once the full package has been put on the table, Eurogroup leaders will decide on a bailout extension at their Emergency Summit on Sunday.

The British Pound traded sharply lower against the greenback, marking a current support at 1.5330. It will now be interesting if GBP makes it again above 1.5420. We see a small hurdle at 1.5415 and a next resistance zone at 1.5465 until 1.5485. Below 1.5350 sterling may head for a test of 1.53.

The Bank of England is scheduled to decide on monetary policy today at 11:00 GMT. However, since no changes are expected, the impact on the British Pound should be insignificant.

U.S. Continuing and Initial Jobless Claims are scheduled for release at 12:30 GMT.

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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 2015 Maimar-FX.

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Euro recovered its losses after ‘No’ vote

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Dear Traders,

The euro slipped sharply to 1.0970 on Greece’s ‘No’ vote. Greece voted with a 61 percent majority against further austerity demanded by creditors, rejecting of further spending cuts and tax increases. While Prime Minister Alexis Tsipras described the result as a “great victory”, seeing himself with a strengthened hand now, the result also significantly raises the chances of a Greek exit from the currency bloc. The euro group must now decide if a financial rescue of the country is still possible.

Euro-area leaders called for an emergency summit on Tuesday. The European Central Bank is meeting today to discuss extending its emergency credits to Greek lenders. As long as negotiations are ongoing between Greece and the euro group the ECB is unlikely to cut the emergency liquidity for Greek banks. The next important date is the July 20 deadline, when Greece is due to pay 3.5 billion euros to the ECB. A non-payment could lead to drastic steps such as an exit of the euro-area.

Even if contagion for other peripheral economies in the euro zone is likely to be contained, investors could remain risk-averse and wait and see what happens now.

The British Pound traded lower against the U.S. dollar last Friday. We see a next support at 1.55. With a significant break below 1.5480, sterling may slide towards 1.5430 and further 1.5350. Current resistances are seen at 1.5650 and 1.5770.

Apart from eurozone financial stability risks in the near term, market participants will keep an eye on the U.S. monetary policy. The Federal Reserve releases FOMC minutes from its June 16-17 meeting on Wednesday. The Bank of England is scheduled to decide on monetary policy on Thursday.

The most important piece of economic data this week will be the ISM Non-Manufacturing Index, due for release today at 14:00 GMT.

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

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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 2015 Maimar-FX.

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Forward Guidance

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Dear Traders,

defining its up-trend, the Euro climbed until 1.3900 last week. Maybe shortly we will see the 1.4000 level. Consolidations can be expected  until 1.3825 and 1.3750, from where we can find new profitable long entries.

The European Central Bank and the Bank of England have pledged to hold down their interest rate to spur the economy.

ECB president Mario Draghi has pledged to keep borrowing costs “at present or lower levels for an extended period of time”, the so called “Forward Guidance”.

Also the British Pound is trading at its heights. A possible sustainable break over 1.6800 could lead the pair until the level of 1.7000, but if it is not able to break its resistance we expect a drop until 1.6640 and further 1.6500.

The new week starts quiet, do not take too much risk. Trade with a smaller position and let’s see how this week is going on.

As always we wish you many profitable trades and a nice week!