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Could ECB Decision Offer Some Breathing Space For The Euro?

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It’s Tuesday and we are back at our trading desks.

Markets have been in a tailspin since Russia’s attack on Ukraine. And the war continues.

While the invasion of Ukraine remains a source of fundamental volatility for the euro and other assets, traders look to the European Central bank decision this Thursday that may offer the euro some breathing space – at least in short-term time frames.

EUR/USD – Going Downhill

The euro slid toward a low of nearly 1.08 on fundamental risk stemming from the war in Ukraine and the collateral damage. If the euro holds, however, above 1.0770 we will shift our focus to a short-term resistance zone between 1.10-1.1050. Falling below 1.0770 could see lower targets at 1.0740 and 1.0650.

GBP/USD – On the way towards 1.30?

The cable’s slide below 1.3150 opens the door for a potential leg down towards 1.30 but the downward move is unlikely to be straight-lined given the oversold situation. We expect that the pair will correct some of its losses towards at least 1.32 before falling further down.

DAX – Sell-Off

The index slid even below 12600 but could stop its fall slightly before 12400. If the index is unable to stabilize above 13800, we could see a dive towards 11300.

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

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Is This The Beginning Of A Bear Market?

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King Dollar has risen against almost everything as investors looked for shelter.

Many traders now question whether the Ukraine war could be the begin of a bear market. Prices whipsawed when the Russian military invaded Ukraine last week but some traders saw it as an opportunity to “buy the invasion”, a behavior that has led to a tremendous reversal in the market. While buying-the-dip gains show investors are piling in, more voices are now warning investors to be careful. Russia’s invasion of Ukraine will cause higher inflation which will force the Federal Reserve to increase interest rates. The invasion also increases the risk of stagflation, when inflation remains high while economic growth and unemployment are also high. The conflict in the middle of Europe could thus mean the end of the bull era of central bank excess and signal the beginning of a bear era of government intervention, social and political polarization and geopolitical isolationism, according to a Friday note from Bank of America Research.

However, while most of the past market declines did not become bear markets, the risk of a bear market is currently higher than at any other time. The sentiment will however depend on developments and may change any day.

EUR/USD – Opening with a downside gap

The down gap indicates a continuation of the downtrend but before bears assume the downtrend to resume, we may see short covering filling the gap. In other words, we may see a correction towards 1.1240 before selling pressures increases again. Nevertheless, if the euro drops below 1.1090, we brace for a decline towards 1.09.

DAX – Heading South

The index opened with a downside gap and could now face the lower support area at around 13600. Short-term bulls will watch out for prices above 14400 with higher targets seen at 14500 and 14800.

Our buy position today at 14210 was closed in profit at 14250.

 

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2022 MaiMarFX.

www.maimar.co

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Turnaround Tuesday Around The Corner?

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This volatile week started on a very profitable note. We booked an 80-points gain with the DAX’s slide and a 40-pips gain with the fall in the GBP/USD. We will secure some of these profits.

We know that following strong movements on a Monday we often see counter movements on a Tuesday – the so-called ‘Turnaround Tuesday’. So, what could we see today after yesterday’s bearish slide? Traders know the answer ;)

GBP/USD – Due for a correction amid a potential Turnaround Tuesday?

We bear in mind that the pair remains oversold which would justify a correction. However, the support area ranges from 1.3440 to 1.3370, so bears might push sterling a little lower before more bulls jump in.

DAX – Breaking all but one support

The index dropped like a stone and broke below 15300 and further below 15000. The fall stopped however shortly before the 14800-support which is also an ascending trendline of the DAX’s primary uptrend. If 14800 breaks, the next lower target will be 14400 followed by 14000. For the bullish trend to strengthen we will need to see a price stabilization above 15800.

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Try out our new signals for cryptocurrencies:

ETH/USD

Long @ 2420

Short @ 2340

We wish you good trades!

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DAX Sells Off Amid Risk Aversion

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The Thanksgiving week was dominated by a cautious mood and thus, a rally in safe havens amid concerns over a new coronavirus variant thwarting the recovery in the world’s economy. Additionally, thin liquidity around the U.S. holiday intensifies the risk-off sentiment.

In short, those who followed the trend at the beginning of the week, profited.

The biggest loser was the DAX which dropped like a stone and broke below all recent support levels. Trading around 15600 earlier this morning, we now see a next lower support zone between 15500 and 15400. With covid cases spiking in Europe, a new bull run above 16000 becomes less likely in the near-term.

We wish everyone a beautiful weekend.

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EUR/USD

Long @ 1.1260

Short @ 1.1185

GBP/USD

Long @ 1.3335

Short @ 1.3290

DAX® (GER30)

Long @ 15570

Short @ 15460

 

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

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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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Copyright © All Rights Reserved 2021 MaiMarFX.

www.maimar.co

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Traders Brace For Heavy Docket Of Event Risks

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Last week ended with a fresh bout of risk aversion in the market, with the safe-haven U.S. dollar benefitting from fragile global risks factors and fears over Federal Reserve tightening including rising rate hike odds.

This week brings high-profile event risks such as the Federal Reserve rate decision (Wednesday), followed by the Bank of England decision (Thursday). While the BoE is expected to leave its stimulus package in place amid a slowing economy, the Fed will probably hint that it is moving towards tapering monthly asset purchases and may make a formal announcement in November. Most economists expect the Fed to start tapering in December. A first rate hike is expected in the second half of 2023, followed by three more in 2024 according to a survey. The much-watched “dot plot” of rate forecasts will include 2024 for the first time and will thus be the big story on Wednesday.

Elevated Fed rate hike odds have produced a more favorable trading environment for the greenback and if the Fed dots surprise to the upside, dollar bulls will have room to price in a more hawkish Fed.

EUR/USD

There is not much positive to report amid the euro’s clear bear trend. From a fundamental perspective, the common currency faces further downside risks in the coming days such as monetary policy decisions of its counterparts as well as Sunday’s German Federal Election. Technically, the risk is tilted to the downside but there is a crucial support zone ranging from 1.17 to 1.1660 which could halt the euro’s fall – at least in the short-term. Additionally, the pair approaches oversold territory, making small rebounds more likely. On the upside, we see a short-term resistance at 1.18. However, if 1.1650 breaks to the downside, lower supports come in at 1.16 and 1.1530.

DAX

The sell-off accelerates. Last Thursday we prepared traders for upcoming breakouts and we got what we have been looking for – much to the pleasure of the bears. This morning we see the index extending its slide towards 15300, while we penciled in a next potential support at around 15270. However, as long as 15000 remains unbroken, we could see some reversal towards 15700 but we bear in mind that political risk could weigh on the index.

Daily Forex Signals:

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2021 MaiMarFX.

www.maimar.co

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