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Brexit Or Bremain? A Fateful Day

Dear Traders,

This is a crucial day for the U.K. with Britain’s vote on membership of the European Union. The island nation will determine its future with or without the EU and the market is eagerly awaiting the decision. The voting booths are set to open at 7 a.m. London time, while first projections are likely to be announced during the evening hours.

The final outcome is anything but certain. Recent polls showed the ‘Remain’ camp being in the lead with 48 percent ‘Remain’ and 42 percent ‘Leave’.  The pound strengthened beyond 1.48 based on the assumption of a victory for the “Remain” campaign. But beware: Sterling is moving in tandem with bookmakers’ odds, while the chances of ‘Leave’ and ‘Remain’ are equal. The sentiment can therefore change very quickly at any time.

“Bremain” scenario: Traders should bear in mind that, even in the case of a pro-EU victory, unlimited upside swings won’t be a foregone conclusion. In other words, gains in the British pound could be limited as the focus will shift to the U.K. economy and the prospects of interest hikes in the aftermath of the vote. Since the Federal Reserve will be the first central bank to raise interest rates, the attention will switch to the U.S. dollar and the prospects of further Fed tightening. This fact may discourage investors to buy the pound unlimitedly.

“Brexit” scenario: In the event of an exit from the European Union, the pound will be vulnerable to huge losses as the consequences are incalculable. The market is currently pricing out a Brexit scenario which is why the market’s reaction on unexpected surprises could be excessive.

GBP/USD

Looking on the big picture, we see chances of an imminent trend reversal. Once the pound is able to climb above 1.4850, it could head for the next major resistance zone which we expect to be at 1.52-1.5350. Above 1.55 it could be tempting to anticipate a test of 1.60 but this would be the most optimistic forecast. However, in case of any negative headlines, the focus will be on the 1.40-support level. If sterling breaks below that level, it could easily fall towards 1.3840, 1.3550 or even lower.

Chart_GBP_USD_Weekly_snapshot23.6.16

EUR/USD

Upcoming breakout? The euro traded with a tailwind, heading for a renewed test of 1.1350. In the light of the highly anticipated result of the U.K. vote traders should prepare for volatile swings in this pair. Above 1.1365 we see a higher likelihood of further bullish momentum, driving the euro towards 1.14 and 1.1440. Above 1.1470 it may head for 1.1520 and 1.1615. Bear in mind, that like the British pound, upswings might be limited as the focus will shift back to Federal Reserve rate-hike expectations in the aftermath of the vote. Extended upswings might be subject to a possible short squeeze which could be short-lived.

Below 1.1280 next lower targets could be at 1.1220 and 1.1160. Below 1.1150 the euro could drop towards 1.10 and even as low as 1.0830.

Chart_EUR_USD_Daily_snapshot23.6.16

It all depends on the results of the Bexit vote and we prepare for large movements to either side. We recommend traders to trade cautiously during the day as wild swings may wipe out open trades, making trading highly risky.

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Brexit Debate Enters Hot Phase

Dear Traders,

The British pound extended its gains towards 1.48 while the euro went into a tailspin Tuesday. Sterling benefited from reduced chances of a so-called Brexit, even if Thursday’s U.K. referendum is not a foregone conclusion. We expect the pound to be highly volatile on the last day before the vote and we will not elaborate on the technical picture today as anything is possible.

The euro dropped towards 1.1235 after it rejected the 1.1350 level. In short-term timeframes we expect the 1.1310-level to act as a resistance for the euro, whereas a lower bound could be currently found at 1.1222/1.12. Above 1.1360 the euro could climb towards 1.1395 and 1.1435. Below 1.1220 we will favor a bearish stance, targeting lower levels at 1.1185 and 1.1135.

Fed chair Yellen adopted a cautious approach to the outlook and the appropriate pace of interest rate hikes in yesterday’s testimony before lawmakers in Washington. She highlighted concerns about longer-term problems in the U.S. economy, adding to signs that the Fed may go for only one hike this year. Yellen is due to address lawmakers for a second day today at 14:00 UTC, while at the same time U.S. Existing Home Sales are scheduled for release.

The Brexit debate is entering the hot phase and traders should prepare for higher volatility ahead of tomorrow’s vote. Whatever the outcome may be, we wait to be surprised and try to get the best out of the market’s movements.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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Brexit Polls Show Neck-And-Neck Race, Will GBP Maintain Its High Price Level?

Dear Traders,

The British pound is exposed to extremely volatile trading conditions in the run-up to the U.K. referendum. Separate polls are showing leads for both sides, creating uncertainty among speculators. The most recent survey showed ‘Leave’ at 44 percent and 42 percent for ‘Remain’, while a different poll saw ‘Remain’ at 53 percent and ‘Leave’ at 46 percent. The British pound rose to a high of 1.4721 on increased risk appetite but, as noted in yesterday’s analysis, it still fluctuates within its range with the annual high at 1.4816. An upside break above 1.4730 may drive the pound towards its May high at 1.4770, while a downside break below 1.4580 could lead to a downswing towards 1.4520 and 1.4470.

U.K. Public Finances are due for release at 8:30 UTC, but Brexit headlines will continue to dominate the price action in the pound.

The euro was slightly tilted to the downside but for the time being, the 1.13-support proved to be intact. Hence, short traders’ efforts didn’t pay off as the downswing was limited. On the upper side, we will now focus on a renewed break above 1.1360 in order to buy euros towards 1.14 and 1.1440. Below 1.1280, we expect bearish momentum to increase, driving the euro towards 1.1230 and 1.12 in a next step.

Fed Chair Yellen is scheduled to testify before lawmakers in a semiannual report today at 14:00 UTC. Yellen is unlikely to provide new insights into the timing of future interest rates but she may stress the risks of a potential Brexit which would harm the U.S. economy. The U.S. dollar might be vulnerable to some losses if she sounds less hawkish.

From the Eurozone, we have the German ZEW Survey scheduled for release at 9:00 UTC, a report that could have a short-term impact on the euro. However, price fluctuation in the EUR/USD will be dominated by the level of risk-appetite for euros and dollars, while economic data will take a backseat with only two days before the Brexit vote.

Before Yellen’s testimony, ECB President Mario Draghi speaks in Brussels at 13:00 UTC.

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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

 

 

 

Fasten Your Seatbelt For The Most Important (Volatile) Week Of The Year

Dear Traders,

This week is the most important week of the year with Thursday’s U.K. referendum paving the way for new trends in the market. The British pound jumped to a high of 1.4624 on eased concerns about the Brexit vote. The euro benefited from that optimistic tone and rose towards 1.14 on increased risk appetite.

The first poll taken after the murder of UK lawmaker Jo Cox showed the ‘Remain’ camp is gaining ground. The tragic death of pro-EU supporter Cox shifted some support back to ‘Remain’ and helped the pound and euro to recover from their lows. However, traders should be careful ahead of Thursday’s vote as volatility is likely to remain extremely high and large fluctuations in both directions are possible.

Ahead of the U.K. vote, Fed chair Janet Yellen testifies before Congress on Tuesday and Wednesday but no one expects her to reveal anything new about the guidance of future rate hikes. Policymakers are likely to wait for the outcome of the U.K. vote before setting the right course.

Traders should prepare for a volatile week in the Forex market and should bear in mind that anything can happen. We are curious to see how the market reacts and wish all traders many profitable trades.

EUR/USD

The euro rallied towards the upper bound of its recent downtrend channel. Once this barrier is significantly breached to the upside, the next important price level will be the crucial resistance zone at 1.14-1.1450. In search of attractive buying opportunities, the 1.1465- level may serve as a profitable long-entry. Above that level, the euro may head for a test of 1.15. Above 1.1530 it could even rally towards 1.1750. For the time being, we see a current support around the 1.13-level. Below 1.1230 the euro could drop back to 1.1130.

Chart_EUR_USD_Daily_snapshot20.6.16

GBP/USD

Looking at larger time frames, the pound sterling is still trading within its range between 1.4750 and 1.40. We expect high-volatile swings ahead of Thursday’s referendum but as long as the currency pair remains confined to that range, there is no new trend. Let’s wait and see.

Chart_GBP_USD_Daily_snapshot20.6.16

 

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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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UK Referendum Cast Its Shadows Before – Investors Are Turning To Safe Assets

Dear Traders,

We welcome you to a new trading week and it is getting more and more exciting as we are approaching the U.K. referendum next week, which will maintain its grip on the markets. The U.S. dollar appreciated against the euro and British pound last Friday as it benefited from safe-haven flows in the run-up to the U.K. vote. The British pound broke below 1.43 as anxiety about a potential Brexit considerably reduced the demand for sterling. While the Yen benefits most from safe-haven flows, the appetite for U.S. dollars mainly hinges on the Federal Reserve’s tightening cycle. Despite a busy economic calendar this week, the main focus will therefore be on the FOMC rate decision on Wednesday. No one expects the Fed to raise interest rates this month but Janet Yellen’s press conference could set the tone of the debate on further tightening in 2016. Apart from the FOMC announcement, the June 23 referendum is casting its shadows before: A survey published last Friday showed the ‘Leave’ camp being in the lead. U.K. Consumer Prices are scheduled for release on Tuesday, while the Bank of England will announce its monetary policy decision on Thursday. However, overshadowed by Brexit concerns, the BoE announcement is going to be a non-event for traders.

From the U.S. we have Advanced Retail Sales (Tuesday) and the CPI report (Thursday) scheduled for release. All in all, it could be a busy week for traders and as long as there is volatility in the markets, there will be opportunities for larger gains.

GBP/USD

The cable broke below its crucial support at 1.43 and could be headed for a test of 1.41 and 1.4050 in a next step. Looking at the daily chart we see a current downward channel which suggests further bearish momentum towards the lower bound at 1.4080. But be careful: The pound fluctuates in an oversold territory and could now be vulnerable to volatile upswings. Thus, pullbacks towards 1.4350 and 1.44 are not unlikely.

Chart_GBP_USD_Daily_snapshot13.6.16

From the Eurozone there will be no major economic reports on the calendar. Thursday’s Consumer Price report could have a minor impact on the euro but how the EUR/USD will trade this week, will mainly hinge on the performance of the greenback and safe-haven demand. The euro marked a current support at 1.1230. With a break below 1.1225 it could extend its losses towards 1.1195 but we expect bearish momentum to be limited as the currency pair could be vulnerable to some pullbacks now. We see a current resistance at 1.13/1.1320.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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Brexit Polls Dominate The Market

Dear Traders,

At present, nothing affects the market more than any new Brexit polls and the associated risks and fears determine the price action in both major currency pairs. While any incoming economic data, whether it is good or bad, is currently taking a back seat, the market seems to be only focussed on the recent U.K. referendum polls. Only yesterday, we learned how sensitive market participants are to shifts in opinion polls, whereby an online poll put the Brexit camp ahead, in contrast to a previous poll showing a lead for the ‘Remain’ camp. As stated in yesterday’s analysis, traders should expect more volatility in the run-up to the U.K. vote which is why both currency pairs remain vulnerable to wild swings.

The euro dropped on Brexit risks, but remained confined to a narrow trading range between 1.1173 and 1.1122 on Tuesday. The performance of the EUR/USD was therefore muted and unfortunately did not provide any sustained profit for day traders. However, the recent downward channel is still intact with a current resistance line at 1.1163 and on the other hand, a support line at 1.1073. The German Manufacturing PMI is scheduled for release at 7:55 UTC but we do not expect this report to have a major impact on the euro.

The British pound fell sharply as two ICM opinion polls showed the Brexit camp ahead. Short-trader’s efforts thus paid off and we were able to pocket a nice profit on the last trading day of May. Given that bearish momentum, we will now focus on a break below the recent support at 1.4442 in order to sell the pound towards 1.4405 in a first step. If sterling drops significantly below 1.4385 we see a next support at 1.4340. A current resistance is seen at 1.4522. The U.K. Manufacturing PMI is due at 8:30 UTC and economists forecast an uptick in May. Whatever the case, Brexit concerns will continue to determine the performance in the pound.

From the U.S. the most important piece of economic data will be the ISM Manufacturing Index, scheduled for release at 14:00 UTC. Any unexpected outcomes should affect the dollar accordingly.

Last but not least, the Federal Reserve releases its Beige Book at 18:00 UTC.

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 2016 Maimar-FX.

www.maimar.co

 

 

 

British Pound Rises As Brexit Seems Very Unlikely

Dear Traders,

The British pound climbed more than 100 pips from our long-entry after latest polls show growing support for the Remain Camp in the June 23 referendum. As a result, the likelihood of a Brexit has significantly diminished and that’s currently helping the pound to regain some strength. We now see a next target at 1.4635 before a correction is becoming more likely. Above 1.4665 however, we see a higher likelihood of further upward swings towards 1.47.

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

Subscribe to our daily signal service http://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