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Watch Out For Higher Volatility Today

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Dear Traders,

As expected, there wasn’t much volatility in the Forex market Wednesday with the euro and pound remaining within narrow price ranges. The GBP/USD was able to stabilize above 1.32 following an upbeat U.K. Services PMI report but the pair rejected the 1.3250-hurdle, at least for now. Generally speaking, the medium-term outlook for the pound is still bullish as market participants prepare for a potential rate hike in August. Odds for an August rate hike are currently at 53 percent.

BoE Governor Carney speaks in Newcastle today at 10:00 UTC and any comments on monetary policy could get the pound moving.

The euro appears to lose some of its downside momentum while we see a higher likelihood of an imminent break above 1.1690 and possibly even 1.1720 in the short-term. The euro’s slight upward bias was also backed by reports that some ECB members are seeing a rate hike in late 2019 as ‘too late’.

From the U.S. we have the ADP report, scheduled for release at 12:15 UTC, followed by the ISM Non-Manufacturing index at 14:00 UTC.

Last but not least, we will pay attention to the FOMC meeting minutes due at 18:00 UTC, which are expected to have a positive tone. If the minutes signal further steepening in the appropriate policy path, the dollar could receive some fresh boost.

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BoE Decision: Is August Rate Hike Still In The Cards?

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Dear Traders,

The British pound ended the trading day little changed against the U.S. dollar after compromise has been reached between the U.K. government and Parliament on the progress of the EU Brexit bill. The pound’s rise to a high of 1.3217 proved short-lived and traders now wonder whether the 1.3140-level could give way to further bearish momentum. A lower target could be at 1.3080.

Today, all eyes will turn to the Bank of England rate decision at 11:00 UTC but there aren’t any actual expectations for a move at this meeting. The big question is rather whether the BoE begins to lay the groundwork for a possible rate hike in August. This is, however, not the most likely scenario.

After that rate decision, BoE Governor Mark Carney is due for his annual Mansion House speech and this may actually turn out to be a more proactive driver for the pound. Carney’s speech will be widely-watched for clues or hints around his expectations for the UK economy.

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We wish you good trades and many pips!

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

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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!

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GBP/USD: Preparing For Potential Short Squeeze Scenario

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Dear Traders,

After the absence of a major driver or catalyst in the markets, today is loaded with market-worthy data and thus, traders are bracing for higher volatility in most major currency pairs. Top event risk will be the Bank of England rate decision with the BoE’s Quarterly Inflation Report. While the BoE is unlikely to raise interest rates at this meeting, it is the inflation report and the press conference with BoE Governor Carney that garner most attention.

The Bank of England will announce its rate decision alongside the release of the central bank’s inflation report at 11:00 UTC. The press conference will follow 30 minutes later.

Following the complete U-turn in rate hike expectations out of the BoE, the central bank has little choice but to signal a rate hike in August to maintain the bank’s credibility. The risk is therefore tilted to the upside with a potential short squeeze scenario in the GBP/USD. If the BoE, however, disappoint in terms of rate hike speculation deviating from their hawkish bias, the pound will further fall.

Another, no less important, report will be the April Consumer Inflation Report (CPI) from the U.S., which is due shortly after the BoE’s decision at 12:30 UTC. The Federal Reserve debate over a fourth rate hike in 2018 is still ongoing, which is why inflation figures could affect current rate hike speculation. Thus, a surprise in CPI data could have a major impact on the dollar, paving the way for some profit-taking or maybe an extension of the dollar rally.

Let’s take a look at the technical picture:

GBP/USD

The cable traded consolidated between roughly 1.36 and 1.35. The short-term bias is slightly bullish, with the focus now being on an uptrend channel between 1.3615 and 1.3515.  A break above 1.3810 could open the door for accelerated bullish momentum towards 1.40. On the bottom side, the 1.35-support remains a crucial price barrier. If the pound drops below 1.3480 we may see a drift towards 1.3330.

EUR/USD: The euro still trades around the falling trendline of its recent downtrend channel. As mentioned in yesterday’s analysis, the 1.19-barrier could prove an important hurdle for euro bulls now. A break above 1.1910 may encourage bulls for a test of 1.1950. Today’s price action will, however, hinge on the appetite for USD, which is why we focus on U.S. CPI data.

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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BoE Super Thursday To Provide Trading Opportunity For Sterling Traders

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Dear Traders,

It’s Super Thursday at the Bank of England, which means we get a rate decision along with the Quarterly Inflation Report and comments from BoE Governor Mark Carney. Today’s meeting is the most important event this week and sterling traders prepare for volatile swings around the monetary policy announcement. The big question among market participants is how hawkish the BoE might be towards the end of this year. The market is fully pricing in a rate increase at the BoE’s Super Thursday in November while market participants see a 50/50 chance of an earlier rate hike in May. If evidence points to a rate rise in May, the pound will rally and may find its way back to 1.42. However, if the tone in today’s statement is not as hawkish as traders are hoping, the pound will fall.

The focus will also be on the inflation report and if economic growth and inflation forecasts are revised higher, GBP/USD could recover some of its recent losses.

There is also the possibility of a muted response following today’s statement. Brexit risks continue to cause uncertainty about the outlook and if those risks have not changed substantially, the market’s reaction to the statement could be muted.

We will know more today at 12:00 UTC.

GBP/USD: The cable found some support around 1.3850 and if this barrier is breached to the downside we expect further losses towards 1.3750. For bullish momentum to accelerate, it would however need a sustained break above 1.40.

EUR/USD: The euro broke out of its recent sideways trend channel and fell towards 1.2240. The break below 1.23 came despite Angela Merkel’s deal with the SPD to form a great coalition in Germany. Technically speaking, the chances are now in favor of further downside potential driving the pair towards 1.2220 and 1.2170. If the euro rises back above 1.2350, bulls may take over control.

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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

 

 

 

Senate Passes U.S. Tax Bill

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Dear Traders,

The British pound ended the trading day unchanged against the U.S. dollar after it fell to a low near 1.3330. The greenback on the other side, strengthened against most of its peers Tuesday with the exception of the euro. Investors awaited the final votes on the U.S. tax-cut legislation with the House taking another vote on the tax bill this morning.

Once the tax bill is behind us, investors will assess how the bill will impact the U.S. economy in the longer run. While the dollar could receive some fresh boost as investors anticipate the tax bill to add growth in the near-term, the longer-term impact on the economy is less certain.

The EUR/USD broke above 1.1825 and rose towards 1.1850. Whether we will see a run for 1.19 remains to be seen and hinges on the risk appetite for euros amid the year-end liquidity drain. Above 1.1865 we expect further gains towards 1.1920.

The GBP/USD remained within a sideways trading range between 1.3420 and 1.3330.

BoE Governor Carney speaks at a Parliament Hearing in London today at 13:15 UTC. If the pound breaks above 1.3420 we anticipate further gains towards 1.3470. If the pound however drops below 1.3340 it could head for a re-test of the 1.33-support.

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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.

www.maimar.co

 

 

 

Pound Drops On Risks Of Hard Brexit But Sideways Trading-Range Remains Intact

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Dear Traders,

Heading into the final trading days of 2017, volatility is expected to remain low in the run-up to the Christmas holiday. There are no significant drivers or market-moving data releases on the economic calendar which is why we recommend taking a cautious approach to new investments now.

The British pound fell to a low of 1.3301 last Friday on risks of a hard Brexit. The second phase of Brexit negotiations between the U.K. and EU will be even harder than the first and investors are skeptical that U.K. Prime Minister Theresa May will achieve a soft landing when U.K. leaves the EU in 2019.

GBP/USD

While we currently favor a sideways trading range between 1.3480 and 1.3280 the risk appears to be tilted to the downside. If the pound falls below 1.3260 we expect further losses towards 1.32. However, even if larger movements are unlikely given the liquidity drain, traders should always expect the unexpected.

EUR/USD: The euro was little changed with the crucial support at 1.17 remaining intact. As long as the euro trades between 1.1920 and 1.17/1.1660 there is nothing new to report.

The economic calendar is relatively quiet this week. The U.S. GDP report (Thursday) may receive some attraction even though no surprises are expected. Traders may also keep an eye on the PCE Index and Durable Goods Orders (Friday) but all these reports might be of less importance as the year draws to a close.

Sterling traders may listen to comments from Bank of England Governor Mark Carney on Wednesday when he speaks at a Parliament Hearing 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 2017 Maimar-FX.

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The Dollar’s Fate Is In The Hands Of The U.S. Tax Reform Bill

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Dear Traders,

U.S. inflation data, at the end of the day, did not have a major impact on the U.S. dollar with the greenback ending the trading day virtually unchanged against the euro and British pound. The EUR/USD soared to a high of 1.1860 before it fell back below 1.18. Our assumption of a slight extension of gains in the EUR/USD has proved correct but the sharp intraday reversal could cause euro bulls to run out of breath now. While the 1.1910-Level remains a crucial resistance on the topside, the euro could now struggle to overcome the 1.1805-hurdle. If the single currency is able to stabilize above 1.18 we may see a run for 1.19 but with bullish momentum running out of steam the euro may head for 1.1730.

Euro traders should keep an eye on the Eurozone Consumer Price report due at 10:00 UTC, which could have a minor impact on the euro’s price action.

The current price action in the GBP/USD frays the nerves of day traders. The pair trades without any discernable direction and for traders looking to assign a directional approach, we recommend waiting for price breakouts either above 1.3270 and 1.3350 or below 1.31 and 1.3020.

Sterling traders should pay attention to a round of Bank of England speakers including BoE Governor Carney who is scheduled to speak at 14:00 UTC.

Apart from market-moving topics like Brexit and monetary policy, the fate of the U.S. dollar is in the hands of the U.S. tax reform. Today, the House will vote on its tax-overhaul bill, aiming to take the most concrete step toward overhauling the American tax system. House Republicans aim to get the tax reform done by year-end and that is exactly what dollar bulls want to see. How the dollar will trade in the near-term could therefore hinge on the outcome of today’s vote.

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 2017 Maimar-FX.

www.maimar.co

 

 

 

Pound Falls On Fears Of Collapse Of Brexit, Focus Now On Inflation

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Dear Traders,

Trading was relatively quiet on Monday with the EUR/USD trading within a narrow 40-pip range. The picture was different in the GBP/USD, which started the week with volatile swings ranging from a daily high of 1.3312 to a low of 1.3225. As mentioned in our analysis from Monday, the pound sterling is currently torn between rising inflation and thus, higher interest rates on the one side and Brexit uncertainty on the other side. Yesterday, the pound came under selling pressure on speculation that Brexit talks could break down, unless the European Union gives ground at a summit of EU leaders later this week. A person familiar with the matter said the entire Brexit process will be in danger of collapse as long as negotiations are failing to make progress. The pound fell to a low of 1.3225 on the concerns about the lack of progress.

The focus will now shift to the U.K. Consumer Price Report, due at 8:30 UTC followed by BoE Governor Carney’s appearance before congress at 10:15 UTC. We expect the GBP/USD to remain vulnerable to volatile swings while we currently see the chances in favor of further bearish movement towards 1.30. If the cable breaks above 1.33 again, it may head for a test of 1.34 but the upward movement could be limited as Brexit concerns continue to weigh on the currency.

From the Eurozone we have the Consumer Price Report and ZEW Survey scheduled for release at 9:00 UTC. These reports may have a short-lived impact on the euro.

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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.

www.maimar.co

 

 

British Pound Takes Breather On Carney Comments

/in /by

Dear Traders,

Monday has been a quite challenging trading day for traders of the EUR/USD and GBP/USD. While the British pound declined against the U.S. dollar after Bank of England Governor Carney’s comments were interpreted as more dovish following last week’s MPC statement, we have shot all our powder and finally missed out on the profitable bearish movement in the GBP/USD.

Carney reinforced the BoE’s view that the rate hike cycle in the U.K. will be “limited and gradual” and acknowledged that there was still clear concern over the health of the economy amid Brexit. His comments weakened the pound in the short term. GBP/USD traded consolidated and fell towards 1.3460. We now see a lower support at 1.34/1.3380 and if the pound drops below that level we may see a correction towards 1.33. On the topside, the 1.3620-level remains unbroken and sterling bulls may focus on a bullish break of that resistance level in order to buy pounds towards 1.38.

The euro traded sideways between 1.1970 and 1.1915. We now focus on price breakouts either above 1.1990 or below 1.1935. The German and Eurozone ZEW Survey are both scheduled for release at 9:00 UTC today and may have a slight impact on the euro.

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 2017 Maimar-FX.

www.maimar.co