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GBP/USD: Upcoming Price Breakouts?

Dear Traders,

The U.S. dollar slightly advanced against the euro and British pound as investors assessed the impact of proposed tax cuts. The next big risk event on the calendar will be Friday’s U.S. jobs report while the release of the ADP Employment Change (due today at 13:15 UTC) may provide a foretaste of what to expect from Friday’s report.

The pound sterling fell to a low of 1.3370 amid stalled Brexit negotiations but it was finally able to end the trading day above 1.34. Brexit talks will continue today and as long as negotiations do not make sufficient progress the pound could remain under pressure.

GBP/USD

Looking at the technical picture we currently see a higher likelihood of potential price breakouts. Based on a symmetrical triangle in the 4-hour chart, these breakouts could happen to either side. Above 1.3460 we anticipate accelerated bullish momentum driving the currency pair towards 1.3515. Below 1.3415 however, we will focus on further losses targeting at 1.3320.

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Euro And Pound Soar Amid Low Liquidity

Dear Traders,

The euro and pound sterling have soared to fresh highs amid low trading volumes. The upward movement in both EUR/USD and GBP/USD was not only driven by low liquidity but also by a weakening U.S. dollar. While trading volume was low with most U.S. market participants being offline for the long holiday weekend, we saw some remarkable movement Wednesday providing us profitable trades. There was some dovish tilt in the Fed minutes which contributed to the dollar’s weakness. While a rate increase in December is almost certain, there was some concern that price pressures would fall short of the Fed’s inflation target for longer. Those remarks cooled rate hike expectations for 2018 and drove the dollar lower in turn.

The EUR/USD broke out of its recent downtrend channel and rose towards 1.1840. Whether we will see a follow-through of the recent upward trend remains to be seen but should be viewed with a critical eye. We expect a next resistance to come in at 1.1880, provided that the euro breaks the 1.1840-barrier significantly. However, given the quiet trading conditions we recommend not expecting too much. A current support is seen at 1.1750.

The GBP/USD headed towards the 1.3340-threshold and it will be interesting now whether the cable is able to break the 1.3350-level significantly or bounces back from its highs. Above 1.3360 we expect accelerated bullish momentum towards 1.34 and 1.3450. A near-term support is however seen at 1.3250.

The U.K. GDP report is due for release at 9:30 UTC and could have a major impact on the pound provided that changes are made to the revisions.

Most action is expected to take place during the European trading hours while trading should be quieter afterwards. Happy Thanksgiving to all of our U.S. traders!

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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 2017 Maimar-FX.

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Chances For Breakouts Increase After Yesterday’s Consolidation

Dear Traders,

Not much has happened on Thursday apart from several false break-outs that have led to a poor performance. It seemed that the currency market took a breather before establishing new trends. Both major currency pairs traded sideways within narrow ranges and strained trader’s nerves. Only this morning we saw a slight upward trend, driving the euro toward 1.1070 and the cable above 1.40. Currently we are looking for break-outs above 1.1080 in the EUR/USD and above 1.4020 in the GBP/USD.

Nevertheless, euro traders should be cautious with bullish engagements below 1.11/1.1120 as the euro is likely to come under pressure ahead of the next European Central Bank meeting in March considering the ECB’s easing bias. Bullish momentum could thus be limited until 1.1150. Before heading towards the 1.11-level a small hurdle could be at 1.1092. On the bottom side the 1.10-level remains in focus.

The GBP/USD trades currently around the 1.40-level. If the pair is able to break above 1.4020/35 we may see a relief rally towards 1.4085 and 1.4120. A current support could be at 1.3920 and sterling bears should wait for a significant break below 1.39/1.3880 in order to sell GBP toward lower targets.

The performance of the U.S. dollar will mainly hinge on important economic data, such as GDP reports, scheduled for release at 13:30 GMT as well as spending figures and PCE indices, due at 15:00 GMT. In case of any surprises we could see strong fluctuations in the greenback.

Euro traders should keep an eye on German Consumer Prices scheduled for release at 13:00 GMT.

We wish you profitable trades and 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 2016 Maimar-FX.

www.maimar.co