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After Dovish Fed Surprise Focus Turns To ECB

The Federal Reserve surprised on the dovish side and thus, caught traders off guard who were speculating on a hawkish signal. The U.S. dollar sharply weakened across the board.

As for our yesterday’s trading signals, we had two losing trades by selling the GBP/USD ahead of the FOMC decision. Our later buy order in the cable at 1.2580, however, compensated all previous losses.

In the EUR/USD we went long at 1.0810 and reached our profit target within seconds.

What has caused this tentative pivot?

As expected, the Fed kept borrowing costs unchanged but policymakers gave the first sign of an impending strategy pivot by embracing a more benevolent characterization of inflation and admitting that rate cut talks have begun. Also, the dot plot showed 75 bp of easing next year, far more than contemplated in September. In other words, the Fed’s forecasts are slowly converging toward the market’s expectations. This bearish bias for the U.S. dollar and yields could thus set the tone moving into 2024.

ECB and BoE next

After the surprise rally yesterday in all of our trading instruments it will be interesting whether there will be more surprises from monetary decisions from the BoE and ECB. In the market’s eyes, the ECB and Fed are seemingly arm wrestling over who will cut rates first next year. The BoE is lagging behind in rate cut expectations.

The focus will be on the updated economic projections and rhetoric from the ECB. The market is pricing in 125 bp of easing by the ECB next year, so if ECB policymakers send a more dovish signal than expected, the euro will fall from its highs. In the hawkish case of any pushback on rate cuts, the euro will continue its uptrend very easily.

 

Our trading ideas for today 14/12/23:

EUR/USD

Long @ 1.0920

Short @ 1.0875*

GBP/USD

Long @ 1.2660

Short @ 1.2615*

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

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Letzte volatile Woche des Jahres?

Diese Woche ist die letzte Handelswoche des Jahres mit einem dicht gedrängten Wirtschaftskalender, der wahrscheinlich zu einer erhöhten Marktvolatilität führen wird, während unsere Handelsinstrumente große Schwankungen erleben könnten. Die ganze Action könnte bereits morgen mit den US-Inflationsdaten beginnen, gefolgt von wichtigen geldpolitischen Ankündigungen der Federal Reserve am Mittwoch und der Bank von England sowie der Europäischen Zentralbank am Donnerstag.

Auf der Suche nach interessanten Handelsmöglichkeiten sollten Händler den morgigen US-Inflationsbericht genau beobachten, um die Gültigkeit der vorherrschenden Zinserwartungen für 2024 zu beurteilen. Die Inflation wird voraussichtlich weiter sinken, aber die Fortschritte in Richtung des Fed-Ziels dürften begrenzt sein, und diese Situation könnte die FOMC- Währungshüter davon abhalten, bei ihrer Zinsentscheidung am Mittwoch eine eher dovische Haltung einzunehmen.

Es wird erwartet, dass alle drei Zentralbanken ihren geldpolitischen Kurs beibehalten werden, so dass der Schwerpunkt auf den Prognosen liegen wird. Was die Zinsprognosen für das Jahr 2024 angeht, könnte der Fed-Vorsitzende Jerome Powell angesichts der Widerstandsfähigkeit der amerikanischen Wirtschaft etwas mehr Spielraum haben als seine Kollegen bei der EZB und der BoE. Diese Tatsache könnte den USD gegenüber anderen Währungen stützen. Der Markt hat allerdings jede Chance auf eine weitere Straffung durch die Fed vollständig ausgepreist. Die Zentralbank wird am Mittwoch die aktualisierten Dot-Plot-Projektionen veröffentlichen, während die Marktteilnehmer darauf wetten, dass die Fed die Zinssätze im Jahr 2024 fünfmal senken wird, wobei eine Zinssenkung um 25 Basispunkte im Mai vollständig eingepreist ist. Sollte die Fed weniger Zinssenkungen vorhersagen, könnte der Dollar seine Erholung aufgrund der aggressiven Signale fortsetzen.

Was die EZB-Entscheidung am Donnerstag betrifft, so wird erwartet, dass die Entscheidungsträger den Einlagensatz zum zweiten Mal in Folge bei 4,0 Prozent belassen werden. Angesichts der sich abschwächenden Konjunktur spekuliert der Markt darauf, dass die EZB die erste große Zentralbank sein wird, die die Zinsen senkt, möglicherweise im April. Mit anderen Worten: Der Euro könnte weitere Verluste erleiden.

Auch das britische Pfund dürfte gegenüber dem Greenback kaum an Wert gewinnen, es sei denn, der US-Dollar verliert an Wert. Auch wenn die BoE die Spekulationen über eine frühzeitige Zinssenkung wahrscheinlich dämpfen wird, könnten die Gewinne beim Pfund sehr begrenzt sein.

 

 

Wenn auch Sie wissen möchten, wo wir unseren Stopp-Loss und Take-Profit setzen und ob wir an einem bestimmten Tag handeln oder nicht, sowie wie wir unsere Positionen managen, dann abonnieren Sie unseren Signalservice.

Wir wünschen gute Trades!

Der Inhalt des Beitrags spiegelt die persönliche Meinung des Autors wider. Dieser übernimmt für die Richtigkeit und Vollständigkeit keine Verantwortung und schließt jegliche Regressansprüche aus. Dieser Beitrag stellt keine Kauf- oder Verkaufsempfehlung dar.

Copyright © 2023 MaiMarFX.

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Last Volatile Week Of The Year?

This week will be the last trading week of the year with a heavy-loaded economic calendar which is likely to bring elevated market volatility while our trading instruments could experience large swings. All the action could already start tomorrow with U.S. inflation data due, followed by significant monetary policy announcements from the Federal Reserve on Wednesday and the Bank of England and the European Central Bank on Thursday.

Looking for interesting trading opportunities, traders should keenly watch tomorrow’s U.S. inflation report to assess the validity of prevailing interest rate expectations for 2024. Inflation is projected to continue to fall but progress towards the Fed’s target is likely to be limited and this situation could prevent FOMC policymakers from adopting a more dovish stance at their rate decision on Wednesday.

All three central banks are expected to hold their policy settings steady, so the focus will be on the forward guidance and projections. As for any interest rate projections going into 2024, Fed Chair Jerome Powell may have room to be somewhat more hawkish than his counterparts at the ECB and BoE, given the resilience of the American economy. This fact could support the USD against other peers. The market, however, has completely priced out any chance of additional tightening by the Fed. The central bank will release the updated dot plot projections on Wednesday while market participants are betting that the Fed will cut rates five times in 2024, with a 25bp rate cut fully priced in for May. If the Fed predicts fewer cuts, the dollar could extend its recovery on the back of the hawkish signals.

As for the ECB decision on Thursday, it is expected that policy makers will keep the deposit rate at 4.0 percent for the second meeting in a row. Given the weakening economic backdrop, the market is speculating that the ECB will be the first major central bank to cut rates, possibly in April. In other words, there could be further losses for the euro.

Also, the British pound is unlikely to gain much against the greenback unless the U.S. dollar sells off. Even though, the BoE is likely to dampen speculation about an early rate cut, gains in the pound might be very limited.

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

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After Hawkish Fed Focus Shifts To BoE

As expected, the Federal Reserve kept interest rates unchanged at 5.25%-5.5% and left the door open for one more rate hike before the end of the year. The Summary of Economic Projections showed 50bp fewer rate cuts in 2024 than previously indicated. The Fed sees just two rate cuts next year which would put the funds rate around 5.1 percent.

The U.S. dollar rose in the aftermath of the Fed’s hawkish rhetoric and pushed both euro and pound sterling lower in turn.

This morning we see GBP/USD trading around 1.23. Below 1.2270 we expect further losses.

The focus today shifts to the Bank of England rate decision (due 13:00 UTC) while the BoE could go either way. Previous expectations were firmly in favor of another 25bp rate hike today but yesterday’s U.K. Consumer Price Index showed softening inflationary pressures which is why market pricing significantly shifts towards a rate pause now. However, according to a statement from UK Chancellor Hunt saying that “Inflation is still too high” and “It’s all the more important to stick to our plan to halve inflation”. In other words, a BoE 25bp rate hike is still well in the cards.

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

Our trading ideas for today 21/9/23:

 

GBP/USD

Long @ 1.2380

Short @ 1.2290

Settings for all trades today: Entries from 8:00 am UTC, SL 25, TP 40

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

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Will GBP Correct On BoE?

The U.S. CPI report surprised lower, at least the headline inflation gauge which came in at 4.9 percent in April, slightly lower than the 5.0 percent forecast. The core gauge printed 5.5 percent which was in line with expectations. As anticipated, the U.S. dollar further weakened in the aftermath of the slightly better inflation print.

The British pound rose to a high of 1.2680 but was unable to overcome this resistance.

The euro, however, refrained from a sustained break above 1.10 and oscillated sideways around the 1.0970-handle.

Today the Bank of England is expected to raise interest rates to 4.5 from 4.25 percent. The BoE decision is scheduled for 11:00 UTC. What matters is the forward guidance. The market expects more rate hikes later this year with a potential pivot from hawkish to dovish in early 2024. Any signs of earlier rate cuts could lead to a deeper correction in the GBP/USD.

Daily Forex and DAX Signals:

If you are keen to know where we put Take-Profit and Stop-Loss, if we trade on a specific day or not and how we manage open positions, subscribe to our signals.

Our trading ideas for today 11/5/23:

EUR/USD

Long @ 1.1010

Short @ 1.0965

GBP/USD

Long @ 1.2630

Short @ 1.2580

DAX® (GER40)

Long @ 15940

Short @ 15890

 

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2023 MaiMarFX.

www.maimar.co

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U.K. Inflation Hits Highest Level In 41 Years

U.K. inflation rose to 11.1 percent from a year ago while this result increases the chances the Bank of England will raise interest rates again next month.

From a technical perspective, there could be room for a bullish extension towards 1.2060 but sterling bulls should be careful since the pound remains slightly overbought. The current support area is seen at around 1.17.

Our trading ideas for today 17/11/22:

EUR/USD

Long @ 1.0410

Short @ 1.0340

GBP/USD

Long @ 1.1925

Short @ 1.1885

DAX® (GER40)

Long @ 14340

Short @ 14290

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.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2022 MaiMarFX.

www.maimar.co

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Fed Holds Dovish Line, Focus Shifts To BoE

The Federal Reserve held its dovish line and continued to project near-zero interest rates at least through 2023 while the central bank upgraded its forecasts for economic growth and the labor market. The dot plot showed that seven of 18 Fed officials predicted higher rates by the end of 2023 compared with five of 17 at the December meeting which was a slightly larger group of ‘hawkish dots’.

As for the withdrawal of the ultra-easy monetary policy, Fed Chair Jerome Powell said in a virtual press conference that the time to talk about reducing the Fed’s asset purchases was “not yet”.

While prospects of stronger growth have ignited some concern about higher inflation among investors the Fed expects that a bump in inflation this year will be short-lived.

In a nutshell, the market did not get such a hawkish outcome leading to a shift in the current risk sentiment. Instead, the Fed’s projected policy path and its upgrade of the economic outlook provide a positive backdrop for risk assets, which is why the anti-risk dollar weakened.

Today we will have the Bank of England rate decision at 12:00 UTC. The BoE is expected to leave monetary policy unchanged but volatility could pick up around the time of the decision.

GBP/USD: The technical picture has not materially changed. We will pay attention to price breakouts either above 1.4020 or below 1.3850 and further 1.3780.

DAX: The index hit our bullish target of 14720. If there is no break above 14760, the DAX could be due to a correction now. A higher support is seen at around 14500.

We wish you good trades!

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Copyright © All Rights Reserved 2021 MaiMarFX.

www.maimar.co

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GBP/USD Jumps On BoE, Focus Now On NFP Report

The British pound posted a sharp increase after the Bank of England stated that negative rates are not coming in the foreseeable future. The main focus had been on the debate about the feasibility of negative interest rates and while the BoE stated that it is appropriate to get ready for negative rates if needed, they do not intend to signal that this policy tool will be implemented in the near-term. The central bank forecast that the U.K. economy is heading for a powerful rebound thanks to an aggressive push to vaccinate citizens. Furthermore, the inflation is expected to rise sharply towards 2 percent in spring.

This was enough for GBP/USD to jump from a low of 1.3565 to a high of almost 1.37. Technically, the pair is back in its sideways range where we pay attention to prices between 1.3750 and 1.3610.

EUR/USD: The euro succumbed to the dollar’s rebound and fell towards 1.1950. Traders should now focus on lower targets at 1.1930 and 1.19 from where we could see a reversal since the pair is in oversold territory.

DAX: The index was finally able to take out the 14030-barrier and could now be primed for a test of 14130. Above that level there are no significant resistances until 14350.

Today we have the Non-farm payrolls report scheduled for release at 13:30 UTC which is forecast to show that 100,000 jobs were added in the U.S. in January after a 140,000 drop in December. A stronger report could increase the buying pressure in the U.S. dollar.

We wish you a beautiful weekend!

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2021 MaiMarFX.

www.maimar.co

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GBP/USD: Highly Profitable Trading

Dear Traders,

Those of you who traded the GBP/USD recently, were able to achieve a significant profit by trading our daily signal alerts. Yesterday, this was once more the case while our short trade hit the profit target in less than five minutes. The pound slid to a low of 1.2602 after Bank of England Governor Mark Carney said he is still worried about the impact of Brexit on the economy. Carney said in yesterday’s morning statement that now is not the time to hike rates. In short, his view is still very bearish and with Brexit negotiations having just begun it could be a bumpy road for the U.K. in the next months. In case of any bad headlines, the pound will fall but looking at the technical picture, we currently see chances of a, at least short-term, recovery from sterling’s low levels.

GBP/USD

The currency pair stopped its fall at the lower bound of its recent downward channel. While this does not necessarily mean that further losses are unlikely, that halt just increases the likelihood of a potential pullback towards 1.27 and 1.28. Furthermore, the Relative Strength Index (RSI) approaches oversold territory, underpinning the chances of short-term upward movements. If the pound drops however below 1.2590 we expect accelerated bearish momentum towards 1.2550 and 1.25.

The performance of the EUR/USD is lagging behind since price fluctuations narrowed. The euro declined on the back of a slightly stronger U.S. dollar but the decline was limited to a low of 1.1118. We will now pay attention to a break of 1.11. After the 1.1075-level has been breached, we could see the euro tumbling towards 1.1020. Current resistances are however seen at 1.1150 and 1.12.

Daily Forex signals:

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

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We wish you good trades and many pips!

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www.maimar.co