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GBP/USD: Upswing Toward 1.43 or Drop Below 1.40?

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Dear Traders,

The U.S. dollar has proven to be stable on Tuesday amid trade tensions between the U.S. and China. Furthermore, the greenback was supported by speculation for an extended Federal Reserve hiking-cycle following hawkish commentary from Fed Governor Lael Brainard. Elsewhere, San Francisco President John Williams will be the successor to NY President William Dudley. Williams is more hawkish than Dudley.

The U.S. dollar strengthened against the euro but ended the trading day unchanged against the British pound.

As expected in our technical analysis from yesterday, the euro found a current support at 1.2250 from where it corrected some losses. If the euro now drops below 1.2240 we expect further losses towards 1.22. For bullish momentum to gain steam we would need to see a break above 1.2360.

Euro traders will watch the Eurozone Consumer Price Index today at 9:00 UTC, a report which could have an impact on the single currency.

The pound sterling rose towards 1.41 after it refrained from a decline below the rising trendline (see our analysis from Tuesday, April 3). If there is a renewed break below 1.4030 the pound could be vulnerable to further losses towards 1.40 and 1.39. However, as long as the pound remains above 1.40 we favor a bullish stance in the GBP/USD.

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.

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Trade War Has Begun

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Dear Traders,

Yesterday was the official start of a trade war with the Trump administration announcing a at least $50 billion tariff on Chinese imports. And that decision had a reciprocal effect. Subsequently, China announced plans for tariffs on $3 billion of imports from the U.S., including products from steel to pork.

Investors now fear an escalation in trade tensions between the U.S. and China while an escalation in trade wars could hurt global growth.

The Japanese yen served as a safe haven while the U.S. dollar’s fate is still uncertain amidst an uncertain geopolitical environment.

The British pound’s reaction to the Bank of England announcement was strong but short-lived. The BoE rate decision was a bit more hawkish than expected, increasing the odds for a next rate in May to 72 percent now. The pound soared to a high of 1.4220 but quickly deviated from its highs as market participants took profit at 1.42. We still see the pound trading within an uptrend channel which is why we expect further gains towards 1.4270. As mentioned in yesterday’s analysis, the current support around 1.4070 proved intact from where some buyers have shown up. For the bias to shift from bullish to bearish it would require a sustained break below 1.40.

The euro bounced off the falling trendline and tested the 1.23/1.2280 support area. If the euro climbs back above 1.2370 we expect further gains towards 1.24. A break above 1.2415 would shift the bias in favor of the bulls.

Traders will watch U.S. Durable Goods Orders today at 12:30 UTC.

It has been a very profitable trading week and we therefore advise traders to secure their weekly profit now.

Enjoy the 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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Roller-Coaster Day

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Dear Traders,

Yesterday can be described as a roller-coaster day in the markets which was not to our liking. News that officials in Beijing, China, have recommended slowing or halting purchases of U.S. bonds have sent the U.S. dollar sharply lower, at least in a short-term. However, the news was not enough to change the current sentiment and thus, the dollar ended the trading pretty much unchanged against the euro and pound.

The price development in the EUR/USD was as expected. We saw a pullback sending the euro toward 1.2020.

We now expect the EUR/USD to trade between 1.20 and 1.1860. Current chances are still in favor of the bears, provided that the euro remains below 1.20. An important support zone is seen around 1.1850 that could be tested before the euro is primed for another leg up.

From the Eurozone we have the German GDP scheduled for release at 9:00 UTC, followed by the ECB meeting minutes at 12:30 UTC.

Trading the GBP/USD has recently proved difficult. From a technical perspective we expect slightly more bearish momentum to come. The pound could fall towards 1.3470 and 1.3450 before buyers are swooping in. A current resistance is however seen at 1.3540-50.

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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.

www.maimar.co

 

 

Focus Shifts From U.S. Dollar Rally To Non-U.S. Event Risks

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Dear Traders,

We welcome you to a new trading week. While the last week ended with broad based U.S. dollar strength, the greenback could be pushed into the background this week given major event risks such as the European Central Bank meeting on Thursday as well as important economic reports from China and U.K.

Market participants will be closely watching U.K. inflation data on Tuesday. Consumer Price Inflation is forecast to accelerate in September given the fact that sterling’s recent drop boosts inflation. We saw the pound tumbling towards 1.2150 where it found some support for the time being. We anticipate some upward movements towards 1.2225/50 ahead of tomorrow’s report, whereas a break below 1.2130 may boost bearish momentum towards 1.21 and 1.2090.

Euro traders are eagerly awaiting the ECB’s policy decision and the announcement from ECB President Mario Draghi. The market was rocked earlier this month by a report that the central bank could start to taper its bond-buying program of 80 billion euros a month. Draghi could therefore attempt to calm the market by emphasizing that the stimulus would continue. The euro fell below 1.10 and tested the 1.0970-support level on the back of a strong dollar. Whether the EUR/USD could be vulnerable to further losses may hinge on the ECB announcement. If Draghi announces changes to the QE program the euro will react accordingly. For the time being, we consider the 1.0970-50 price area as a support for the pair. On the topside we see a current resistance at 1.1150.

From the U.S. we will have less market moving data this week with the CPI report (Tuesday) being the only interesting piece of economic data. Politically, U.S. presidential candidates Hillary Clinton and Donald Trump will hold their final debate on Wednesday. 

Today, Eurozone Consumer Prices are scheduled for release at 9:00 UTC but this report is not expected to have a major impact on the euro. Furthermore, U.S. Industrial Production figures are due at 13:15 UTC.

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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 2016 Maimar-FX.

www.maimar.co

 

 

 

EUR/USD: Will The 1.10-Barrier Withstand The Upward Pressure?

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Dear Traders,

While U.S. nonfarm payrolls have surged to 292K jobs in December, beating all estimates, Friday’s dollar rally did not last long. The spoilsport was slower wage growth, which disappointed the market’s expectations and increased less than 2.7 percent.  The EUR/USD experienced a sharp dip towards 1.08 at the time when payrolls were released but the pair was able to quickly recover all losses. As noted in previous analysis, the 1.10-1.1050 area remains to be a key resistance zone. As long as the currency pair trades below that area, we will favor a bearish stance, targeting lower price levels at 1.0810 and 1.0720.

The British Pound fell to a five-year low against the dollar, dipping slightly below the 1.45-mark. A reason for GBP’s current weakness is a more pessimistic outlook for a first rate increase by the Bank of England. In the light of the current financial turmoil in China the BoE’s policy stance could be more dovish, waiting with a liftoff until well into 2017. In addition, the uncertainty surrounding the U.K.’s possible exit from the European Union threatens to weigh on the economy, which is why the BoE is expected to keep policy unchanged for a considerable time. The central bank will announce its latest monetary policy decision on Thursday. Aside from the BoE interest rate decision, Industrial and Manufacturing Production numbers, scheduled for release on Tuesday could be interesting to watch.

The most important piece of U.S. data will be Retail Sales, due for release on Friday. Furthermore, we will have some speeches of Federal Reserve officials throughout this week, which may impact on the dollar.

There are no major economic reports from the eurozone this week but the eurogroup meeting towards the end of the week could reveal interesting information for euro traders.

Let’s wait and see. We wish you a good start to this week and successful trading.

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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

 

 

 

U.S. Dollar Benefits As A Safe-Haven But Gains Were Limited

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Dear Traders,

The first trading day was characterized by a worldwide selloff sparked by slower growth in China. Slowing manufacturing in Asia’s largest economy fueled fears over the possible effects for global growth and led to safe-haven flows into U.S. dollar and Yen. While the euro initially traded higher against the greenback which was mainly driven by expectations of stronger German consumer prices, the common currency came under selling pressure when inflation data fell short of expectations.

The U.S. dollar benefited from safe-haven flows but downward moves in both pairs were only short-lived. GBP/USD broke below 1.4690 but quickly found a support at 1.4663. The EUR/USD dipped below its important support at 1.08 but ended the day comfortably above $1.08. We are still looking for a sustained break of 1.08/1.0780. A next lower target could be at 1.0735/30.

The most important data from the eurozone will be Consumer Prices, scheduled for release at 10:00 GMT today. If CPI data shows any surprises to the upside the euro could be heading towards 1.09 and 1.0935. Before that we will keep an eye on the Labor Market report from Germany, due for release at 8:55 GMT. The British pound marked a short-term resistance at 1.4730/40. We will wait for a significant break above 1.4755 in order to buy sterling towards higher levels. The UK Construction PMI, scheduled for release at 9:30 GMT may help the currency to trade higher.

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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

 

 

 

Is China’s Devaluation good or bad for the U.S. Dollar?

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Dear Traders,

The euro rallied as Greece reached an initial agreement with creditors on the terms of a third bailout. Euro-bulls were able to gain a nice profit until the current resistance around 1.1080.

The U.S. dollar got no major support from China’s Yuan devaluation.

While China’s move to devalue the currency by 1.9 percent raises doubts on the health of the world’s second-largest economy and generally leads to safe-haven flows into the U.S. dollar, the currency move could also pose a challenge for the Federal Reserve. One of the major concerns for the Fed is a strong U.S. dollar, which is holding inflation low. In a currency environment of an easier money path where other central banks are going to ease monetary policy in order to boost exports, it could be hard for the Fed to justify an interest rate hike this year. This fueled speculation the Fed’s actions could be pushed into 2016. With this in mind, the U.S. dollar could be vulnerable to further weakness in the near-term.

The British Pound traded sideways, accompanied by a slight downward tendency. The U.K. labor market report is due for release today at 8:30 GMT. Average Weekly Earnings are forecast to show a decline which could pose further downward momentum for the pound sterling.

The only piece of eurozone data today will be Industrial Production scheduled for release at 9:00 GMT.

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 2015 Maimar-FX.

www.maimar.co