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Market’s Sell-Off Intensifies

The market’s sell-off intensified on Wednesday and while we, as day traders, benefit from sharp market moves, the U.S. dollar’s strength is impressive given the threat around the U.S. debt ceiling and the risk of default. The greenback benefits from its role as a safe haven currency but with such a specific fundamental threat, investors should be careful.

GBP/USD – Pound at risk of sharp declines

The cable broke below all crucial support zones, losing over 2 percent this month while no one can say how low it might go. The mix of supply-chain chaos, faster inflation and the threat of interest rate hikes is causing anxiety among investors. Some investors might fear that an early rate hike will worsen the growth prospects for the U.K. From a technical perspective we know that bearish movements are typically stronger and more unpredictable than bullish movements. We therefore pencil in a next lower target at 1.32. Former supports can now turn into resistances, such as the former 1.36-support.

EUR/USD – We finally got the bearish break!

The euro broke below 1.1670 and headed for a test of the crucial 1.16-mark. Currently we see the pair holding above 1.16 but it could be only a matter of time until 1.16 breaks significantly. We now see a lower target at 1.15, whereas a lower resistance could come in at around 1.1690.

Today is the final trading day of September and our results for this trading month are quite good: +598 pips which is equal to a net profit of $ 2390 by a low-risk management of only 1% per trade.

 

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Pound And DAX Sell-Off – Next Targets To Watch Out

Tuesday saw a broad-based sell-off on concerns about inflation. More specifically, concerns over the debt-ceiling impasse added to the fresh bout of risk aversion. The U.S. dollar benefited.

Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen warned in a Senate hearing that a U.S. default due to a failure to raise the debt ceiling would have catastrophic consequences. Republicans blocked a move to raise the debt limit.

The worst performer was the British pound that sold off as investors turned cautious on surging energy prices and panic-buying.

GBP/USD – Risk-aversion sent the pair tumbling

The cable broke below 1.36 and headed towards 1.35. We now see the pair within a crucial support zone ranging from 1.36 until 1.3450. We expect some rebound as long as 1.3450 holds.

DAX – Bring it down

The index reversed course after 15700 proved to be difficult to overcome. Traders now eye the crucial 15000-support followed by 14900. If 14800 breaks, we get a sell signal with a lower target around 14300.

EUR/USD – Where is the breakout?

The euro refrained from a technical breakout while prices are confined to a very narrow range. We keep an eye on a upside move above 1.17 to anticipate a higher target at 1.1740, or on the downside, a break below 1.1670 that could lead to further losses towards 1.1630.

 

We wish you good trades!

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British Pound Sharply Falls on Prospects of a No-Deal

Dear traders,

Friday’s disappointing U.S. employment data had little impact on the haven-linked U.S. dollar which largely underperformed. We decided not to trade Friday’s choppy movements in EUR/USD and GBP/USD and stayed on the sidelines.

Elsewhere, global equities aimed mostly higher as the world moved closer toward the first doses of a coronavirus vaccine.

The euro is eyeing the European Central Bank rate decision on Thursday where the ECB may increase bond-buying operations. Last week’s rise in EUR/USD took it to a high of 1.2177 and traders now wonder whether the ECB would intervene to weaken its currency. Generally speaking, the central bank is more likely to look at the euro’s value against the currencies of the EU’s major trading partners to evaluate the euro exchange rate. Nonetheless, bulls in the euro might be cautious ahead of the ECB decision, which is making a correction more likely in the next days.

What is expected from the ECB

No change in interest rates is expected but the central bank has hinted that it will ease monetary policy still further. An increase in its Pandemic Emergency Purchase Program (PEPP) of around 500 billion euro is the most likely level. Such action would normally weaken the currency but given the fact that these times are not normal, anything can happen.

EUR/USD Technical picture

On short-term time frames a double top-pattern could suggest upcoming bearish momentum, provided that the euro slips below 1.21. A lower target could be around 1.2040. However, if the euro rises back above 1.2180, gains may be extended until 1.22 but any bullish move could be on shaky grounds.

Brexit is the elephant in the room

The pound posted its largest decline in almost three months after Michel Barnier warned that Brexit talks could collapse in the next few hours. Optimism now turned to pessimism and sterling traders brace for a no-deal scenario.

GBP/USD Technical picture

The pound extended its gains until 1.3539 on Brexit optimism but now the facts count. In case of no deal, the pound will quickly erase its gains and could even fall towards 1.3050. The last important support was 1.34 early morning and now that the pound broke below 1.33, we will shift our focus to the 13220-00 support. On the upside we would need to see a rise back above 1.35 in order to encourage bulls for a run for 1.3580-1.36.

We went short this morning at 1.3370 and were able to book a good profit.

We wish you good trades!

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GBP/USD Holds Above 1.30

Dear Traders,

Sellers in the GBP/USD remained in control after the U.K. CPI fell short of expectations. The soft inflation report is making a BoE rate hike next month less likely than previously expected. The pound tested the 1.3010-mark but was later able to stabilize above 1.3050. Higher resistances could now come in at 1.3150 and 1.3230. As long as the pound remains below 1.3230 we may see a dip towards 1.2950.

Sterling traders may keep an eye on U.K. Retail Sales today at 8:30 UTC.

For day traders of the EUR/USD there was nothing to gain Wednesday. The euro fell victim to a strengthening dollar but losses were limited to the 1.16-handle. As long as 1.16 holds we expect the pair to trade between 1.1720 and 1.1620.

Given the liquidity drain, traders should bear in mind that trading conditions could be challenging during the summer months. A proper risk management is therefore indispensable.

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 2018 Maimar-FX.

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Can U.K. Inflation Numbers Finally Lift The Pound?

Dear Traders,

The biggest story in the market was the sharp drop of the British pound as sellers have shown-up in the GBP/USD following hawkish comments from Fed Chair Jerome Powell. With the U.S. economy remaining in good shape despite recent worries about trade tensions, the FOMC believes that “the best way forward is to keep gradually raising the federal funds rate.” The U.S. dollar received a boost from that upbeat outlook with traders bracing for further tightening from the Fed. The market is now pricing in a 90 percent chance of a next rate hike in September and a 64 percent chance of a hike in December.

With the dollar regaining strength both euro and British pound came under increased selling pressure. The GBP/USD dropped more than 140 pips from our short entry level while the EUR/USD slid back towards 1.1650.

Today is day 2 of Powell’s testimony and traders may be looking for further gains in the dollar. We also have the U.K. June inflation numbers scheduled for release at 8:30 UTC. This will be the final piece of CPI data ahead of the BoE August rate decision so watch out for volatile movements in the GBP/USD around that important 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 2018 Maimar-FX.

www.maimar.co

Profitable Sell-Off In EUR/USD And GBP/USD

Dear Traders,

After several days of sluggish price fluctuations, yesterday has proved to be a profitable trading day in particular for short traders of the EUR/USD and GBP/USD.

The British pound continued its slide versus the U.S. dollar on the back of worse-than-expected U.K. inflation data. The annual CPI fell to 2.4 percent from 2.5 percent while the core CPI fell to 2.1 from 2.3 percent. Lower inflation could keep interest rates lower for longer with the Bank of England being in no rush to tighten monetary policy sooner rather than later. Thus, BoE rate hike expectations are pushed back to November.

The pound marked a fresh support at 1.3305 from where a slight recovery started. As long as pullbacks are limited to 1.34 and 1.3450, sterling bears might retain control.

The euro fell below 1.17 after the weak PMI reading put further pressure on the single currency. We now focus on the 1.1810-level which could act as a short-term resistance. A break below 1.1650 could open the door for further losses towards 1.1620 and 1.1550.

The FOMC Minutes had only a limited impact on the dollar’s price action. With the markets widely anticipating a Fed rate hike in June the minutes were not expected to reveal anything new. The only note in the statement that weighed on the dollar was that “it was premature to conclude that inflation would remain at levels around 2 percent”.

Today we have U.K. Retail Sales scheduled for release at 8:30 UTC. Furthermore, BoE Governor Mark Carney is scheduled to speak at the BoE Markets Forum in London.

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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 2018 Maimar-FX.

www.maimar.co

 

 

Pound Drops On Decreased BoE Rate Hike Odds

Dear Traders,

Thursday has proved to be a high volatile trading day which became most visible in the pound’s price action following the BoE Super Thursday rate decision. While we have focused on a potential short squeeze in the GBP/USD, provided that the Bank of England would have maintained its hawkishness, the opposite scenario happened. The BoE went dovish and disappointed sterling bulls that had hoped for a bullish reversal from the pound’s lows. BoE policy makers decreased their near-term hawkish monetary policy expectations and noted that inflation may have peaked. Inflation and GDP forecasts were lowered. BoE Governor Mark Carney was back to the previous ‘slower and gradual’ rate hike path instead of warning that rate hikes could happen faster than expected.

Consequently, rate hike bets for an August rise fell to 42 percent from 62 percent. The most likely meeting for when a rate hike would occur is probably the November meeting, with a current priced-in probability of 64 percent.

As for the U.S. dollar, U.S. inflation numbers disappointed but, looking at the price action in the EUR/USD and GBP/USD, the greenback refrained from showing any signs of weakness shortly after the numbers were released. However, even though inflation numbers came in weaker-than-expected, the Fed is likely to maintain its current rate hike path.

GBP/USD: The cable bounced off the rising trendline refraining from a climb above 1.3620 and finally headed for a break below the 1.35-support. At the end of the day however, the pound was more or less unchanged against the dollar with any larger swings lacking.

We will now focus on a trading range between 1.3630 and 1.3440. Any breakouts above or below these levels can spur momentum to the respective direction.

EUR/USD: The Euro tested the area around 1.1950 and euro bulls should keep an eye on a potential run for 1.20 now. As long as the euro remains above 1.1880 we favor the upward momentum.

ECB President Draghi will speak in Florence today at 13:15 UTC.

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We wish you good trades and many pips!

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British Pound Continues Decline On Carney Comments

Dear Traders,

The pound sterling continued its decline on Thursday with the cable dropping below 1.4145 and easily breaking through the 1.4090-support. Whether the pound’s sharp trend reversal will be sustained within the near-term remains to be seen but short traders in the GBP/USD should be rather cautious, at least for now.

Another reason for accelerated bearish momentum in the cable was an interview with Bank of England Governor Mark Carney who downplayed expectations of a rate hike at the BoE’s next meeting in May. He said that one rate hike is likely in 2018 but there are other meetings over the course of this year. However, if the BoE chooses to raise rates next month, despite recent data disappointments, sterling bulls may take over control ahead of the monetary policy decision on May 10.

GBP/USD: A crucial support is now seen at 1.4010/1.40 but with no important economic reports or fundamental events scheduled for release today it is unlikely that the pound is vulnerable to a downside break of that important barrier. A current resistance, on the other hand, is seen between 1.4150-1.4180.

The euro’s second attempt to break above 1.24 ended in failure, which is why the risk remains tilted to the downside. As mentioned in previous analysis, short traders in the EUR/USD should keep tabs on a break of the 1.23-barrier. Lower targets could be at 1.2265 and 1.2230. Euro bulls, on the other hand, should wait for an upside break above 1.2430.

We wish you 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 2018 Maimar-FX.

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Pound Slumps On Disappointing Inflation Data

Dear Traders,

The biggest story in the Forex market on Wednesday was the sharp drop of the British pound. The pound extended its losses towards 1.4170 following the release of disappointing U.K. inflation data. Inflation fell to 2.5 percent, the lowest level in a year and investors fear that the lower reading could encourage Bank of England policy makers to postpone an imminent rate hike in May. Consequently, expectations for a rate hike next month dropped to a 65 percent probability, down from 87 percent.

GBP/USD

From a technical perspective, we saw the pound rushing through a previous support-area between 1.4250 and 1.4220 which turned into a current resistance now. A lower support now comes in at around 1.4145. However, traders should bear in mind that the overall uptrend is still intact and with the next BoE meeting (and a potential rate hike) still three weeks away, buyers may take the opportunity to buy pounds at lower levels.

We will keep tabs on a price range between 1.4250 and 1.4140 now. If the pound breaks out of that range we might see momentum accelerating to the respective direction. A lower support is seen at 1.4090, whereas for the bullish bias to resume it would need a renewed break above 1.4315.

The U.K. Retail Sales report is due for release today at 8:30 UTC.

In contrast to the high volatility in the GBP/USD, we have seen a lackluster price development in the EUR/USD. The pair is still range-bound and this long period of range (three months already) has discouraged many traders from trading the EUR/USD. However, there have been some profitable trading opportunities but larger swings tend to be rare at the moment.

We are still looking for an upside break of the 1.24-barrier and if that breakout happens our patience could pay off. Based on the recent uptrend channel we expect a higher bullish target to come in at around 1.2470. Bears in the EUR/USD should, however, wait for a significant break below 1.23.

Daily Forex Signals:

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

View our daily signal alerts https://www.maimar.co/category/daily-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 2018 Maimar-FX.

www.maimar.co

 

 

 

British Pound Falls On Brexit Concerns

Dear Traders,

The U.S. dollar ended the month of February higher against other major currencies such as the euro and pound sterling.

Recently, however, it was not only the dollar’s strength that drove major pairs lower. The British pound came under increased selling-pressure as U.K.’s Prime Minister Theresa May rejected a proposed Brexit draft from the EU. The document contained details about the U.K.’s exit from the EU bloc. May is due to deliver a speech tomorrow so the price action in the pound could be volatile or even messy ahead of that speech.

Today, traders will be watching the PCE Core (13:30 UTC), the Fed’s favorite inflation indicator and the Manufacturing ISM report (15:00 UTC). Furthermore, we have a second appearance from Fed Chairman Powell before the Senate Banking Committee today at 15:00 UTC, but the market could remain largely unaffected by today’s testimony.

EUR/USD: The euro dropped below 1.22 but still holds above 1.2165 which means that it finds itself within a crucial support zone. We have the Italian election on Sunday, so investors may take profits ahead of the weekend which could lead to further losses in this pair. As mentioned in previous analysis, the next crucial price level will be 1.2160 and for euro bears it would need a sustained break below that level in order to anticipate further downward momentum. A current resistance area is seen between 1.2250 and 1.23.

GBP/USD: The pound declined on Brexit concerns and we now expect a next lower target to be at 1.36. However, traders should be careful trading the pound as the price action in the pound could become messy ahead of May’s Brexit speech tomorrow. We now expect prices to accelerate between 1.40 and 1.36.

Daily Forex Signals:

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

View our daily signal alerts https://www.maimar.co/category/daily-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 2018 Maimar-FX.

www.maimar.co