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Pound Drops On Gloomy Economic Prospects, Will Employment Data Brighten The Mood?

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Dear Traders,

While the euro still lacked a clear direction the British pound showed some larger moves on Tuesday after U.K. inflation data came in unchanged at 0.6 percent, disappointing analyst forecasts of a rise to 0.7 percent. Sterling fell more than 100 pips from our short-entry after consumer prices held steady in August. The question therefore arises whether the Bank of England believes that there is a need for a further rate cut to stimulate growth and push inflation nearer towards the central bank’s 2 percent target. The BoE is expected to keep interest rates unchanged at tomorrow’s meeting, but policymakers could still cut them further by year-end. The pound therefore remains a sell on rallies.

The U.K. Labor Market report is scheduled for release at 8:30 UTC today and may help paint a clearer picture of the situation of the U.K. economy in the aftermath of Brexit.

GBP/USD

Sterling traders should pay close attention to the next support area at 1.3160/50. A significant break below that level could send sterling towards the next support at 1.31 from where it could bounce back. With sterling trading above 1.3150 we anticipate a slight correction towards 1.3250 and possibly even a renewed test of 1.33.

chart_gbp_usd_4hours_snapshot14-9-16

The euro remained confined to its narrow 60-pip trading range and euro traders must exercise patience. The euro would now need to break below 1.1170 to reinvigorate fresh bearish momentum. With no major economic data scheduled for release from the Eurozone, we expect the pair to continue its sideways trend between 1.1250 and 1.1170. We recommend traders to take profits at smaller targets if there are any.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2016 Maimar-FX.

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All Eyes On U.S. Payroll Report

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Dear Traders,

The biggest story in the markets yesterday was the British pound which dropped like a stone after the Bank of England unleashed a stimulus package to combat the post-Brexit fallout. All MPC policy makers have unanimously decided to cut interest rates for the first time in seven years while further rate cuts may follow later this year if the economic outlook proves to remain grim. BoE Governor Carney said in his statement that the central bank “took these steps because the economic has changed markedly”, declaring that all elements of the stimulus can be taken further, including another rate cut. Furthermore, the BoE cut its growth forecast for 2017 to 0.8 percent from 2.3 percent (the most ever) and lowered its 2018 predictions. All this was enough for sterling bears to drive the pound lower towards 1.31. A next support area could now be at 1.3085-1.3065. Once the 1.3060-level gives way to the downward pressure, we could see sterling falling towards 1.30.

The euro remained largely unchanged against the U.S. dollar and traded comfortably between 1.1150 and 1.1115. We were a bit unlucky with our short-entry at the lower bound of the euro’s trading range which was exactly triggered before the price reversed. We now focus on a break below 1.11 before shifting the attention to the 1.1050-support. Euro bears should rather wait for prices below 1.1050 in order to sell the euro towards lower levels. However, above 1.1190 the euro may head for another test of 1.1230. A current resistance is seen at 1.1275.

Chart_EUR_USD_4Hours_snapshot5.8.16

Today it’s payrolls-day again and all eyes will be on the highly anticipated U.S. labor market report at 12:30 UTC. The monthly jobs report will provide more information on whether the Federal Reserve can raise interest rates in 2016. The report is expected to show a slower job growth in July after the strong increase in June but this does not necessarily mean that dollar bulls have no chance this month. Market participants will also pay close attention to the unemployment rate and wage growth figures and if these headlines come in with a positive surprise the dollar will rally. In case of any disappointments however, the greenback might be vulnerable to losses.

We wish good trades and a beautiful weekend.

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

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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

 

 

 

Will The BoE Deliver Or Disappoint?

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Dear Traders,

The U.S. dollar slightly advanced versus the euro after the ADP report came in better than expected. Unlike the euro, the British pound lacked direction before the Bank of England’s rate decision and fluctuated within a sideways range of 100 pips.

Today, there is only one subject in the market: The Bank of England rate decision and Inflation Report, scheduled to be released at 11:00 UTC. Our focus therefore shifts to the GBP/USD as we prepare for volatile swings. While a 25bp rate cut is widely expected, the price action will depend on how aggressive BoE policymakers will support their dovish stance. If they signal further easing in the near-term, the pound could quickly fall towards 1.32 and even lower. On the other hand, if the central bank is in no hurry to introduce further easing except the anticipated 25bp rate cut, investors could be disappointed and give up on their short positions. The pound could surge as a result of a less dovish BoE.

However, as stated in yesterday’s analysis the 1.3420 level could act as a crucial resistance for the pound. Hence, gains could be limited until 1.3425 and 1.3480. Only a significant break above 1.35 would change the bias in favor of the bulls. On the bottom side, we will focus on the 1.32-level. In case sterling drops below 1.3170 we see chances of an extended downward move towards 1.3030.

Given the fact that today’s focus is on the pound sterling, we do not expect larger fluctuations in the EUR/USD. The euro could trade sideways between 1.12 and 1.11. We recommend traders not investing too much today and take profits at smaller targets if there are any.

Daily Forex signals:

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

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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

 

 

 

Volatile Swings Expected Throughout The Entire Week

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Dear Traders,

We welcome you to the trading month of August. While markets are usually quieter during this summer month, the first week of August might be different this year as we have big market movers ahead of us. Before the highly anticipated U.S. Nonfarm Payrolls report, due for release on Friday, traders will scrutinize the ISM Manufacturing (Monday) and ISM Non-Manufacturing index (Wednesday). Apart from these market-moving reports, sterling traders prepare for a volatile week as the Bank of England is expected to cut interest rates and add stimulus to stem a potential fallout from Brexit. Analysts predict an aggressive action from the BoE, which could increase the pressure on the British pound. The BoE will announce its rate decision alongside the release of its Quarterly Inflation Report on Thursday. While the overall bias remains bearish for the pound, traders should prepare for volatile swings ahead of “Super-Thursday”. The sentiment only changes from bearish to bullish in case of a sustained break above the resistance area at 1.3485/1.35. On the other side however, if sterling is not able to break below 1.30 in order to reinvigorate fresh bearish momentum, we expect the current sideways trend to continue.

The U.S. dollar weakened against its counterparts after the U.S. GDP expanded at less than half the rate economists had forecast. The weak domestic data led to speculation the Federal Reserve may push back a rate increase to 2017. The focus therefore shifts to the U.S. labor market report this week and it would need an ambiguous strong report to help the dollar.

EUR/USD

The euro rallied towards 1.12 on the back of dollar weakness and broke above a secondary downward channel while it is now facing the higher resistance line of its primary downward channel at around 1.13. Gains might be limited until that level, whereas the 1.11-level could lend a short-term support to the euro.

Chart_EUR_USD_4Hours_snapshot1.8.16

Important economic data for today:

7:55 EUR German Manufacturing PMI

8:30 UK Manufacturing PMI

14:00 USA ISM Manufacturing

(Time zone: UTC)

Daily Forex signals:

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

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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

 

 

 

Bullish Bias On GBP/USD As BoE Policymakers Wait For August

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Dear Traders,

Investors were caught on the wrong foot as the Bank of England has held interest rates steady at 0.5 percent and thus refrained from prematurely responding to the clouded economic outlook. Market participants priced in more than an 80 percent probability the BoE would lower the rate in July and were therefore disappointed. The pound jumped more than 240 pips from our long-entry in an immediate response to the decision. However the focus now shifts to the BoE’s next monetary policy meeting in August when the central bank will make a full assessment with new forecasts in its inflation report. Until then the performance of the pound will be determined by risk appetite. Nonetheless traders should bear in mind that the pound remains a sell on rallies and it might be worthwhile therefore to sell the pound at crucial resistance levels.

Technical outlook GBP/USD (for subscribers):

The euro rose in tandem with the pound but gains were limited until the upper bound of the euro’s current trading range. Once the common currency is able to break above 1.1170 we could see a test of 1.1215 in a next step. However, the performance of the euro will be determined by risk appetite and U.S. data. The most important piece of U.S. data this week will be Retail Sales scheduled for release at 12:30 UTC alongside the Consumer Price report. Eurozone CPI data (9:00 UTC) is, however, not expected to have a significant impact on the euro as no changes are forecast.

Last but not least, Michigan Confidence is due for release at 14:00 UTC but the focus will be on retails sales and CPI figures.

We wish profitable trades for today and a beautiful weekend.

Daily Forex signals:

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

Subscribe to our daily signal service https://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