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Will The Pound Receive A Boost From U.K. GDP Data?

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Dear Traders,

The U.S. dollar appreciated against its major counterparts in the aftermath of the Fed’s minutes. The tone of the FOMC minutes was passively hawkish while the transcript showed increasing confidence that economic growth will pick up steam despite inflation concerns.  Market participants are now pricing in the possibility of a tighter Fed rate hike path with a current 90 percent chance of a next rate hike in March and a 60 percent chance of three rate hikes through the year. The possibility of even four rate hikes in 2018 is currently over 20 percent. After initial teething problems, the dollar was finally able to end the trading day in positive territory against the euro and pound.

The British pound was volatile as expected but again failed to overcome the 1.40-barrier. Technically speaking, however, we got the price breakouts we were looking for and given the fact that 1.40 remained unbroken we got a dip towards 1.39. A next lower target could now be at around 1.3850/30.

Today we have the U.K. GDP scheduled for release at 9:30 UTC and this report could possibly provide a boost to the weakening pound.

EUR/USD: The euro traded with a downward tilt on the back of a strengthening dollar but from a technical perspective, we still see this pair confined to a sideways trading range between 1.2550 and 1.22. Only if the euro breaks significantly below 1.22 the short-term outlook will shift in favor of the bears.

The next top event risk is the minutes from the European Central Bank’s January meeting which are due at 12:30 UTC. However, unlike the January release, which covered the December meeting which had a new set of Staff Economic Projections revealed, the coming minutes will have much less hard information to discuss. Thus, it could be a non-event for euro traders.

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Greenback Continues Recovery But Today It’s Turn-Around Tuesday

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Dear Traders,

The U.S. dollar continued its recovery against all major currency pairs and thus, pairs like EUR/USD and GBP/USD trended lower at the start of this week. While short traders were able to book a profit yesterday we recommend a cautious approach when expecting further bearish momentum. On so-called ‘turn-around Tuesdays’ there is a risk that we may see some pullback following Monday’s decline.

GBP/USD: The cable broke below the psychological level of 1.40 and, as mentioned in our yesterday’s analysis, chances could be in favor of the bears now. A next lower target could be around the 1.39-barrier and if 1.39 breaks, the pound may drift lower towards 1.3830/00.

For bullish momentum to accelerate, the pound would need to climb back above 1.4030.

As for the EUR/USD, we still see the pair trading within its recent sideways trading range while remaining above 1.2335. As long as 1.23 holds, we anticipate pullbacks towards 1.2430/40. Higher resistances are seen at 1.2480 and 1.2540. If the euro, however, falls below 1.2290, we expect further losses towards 1.22.

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Euro Depreciates Against Dollar, Pound With A Tailwind

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Dear Traders,

The U.S. dollar experienced a long-needed recovery against most of its major peers at the beginning of this week while the strongest move was seen against the euro. The EUR/USD dropped below 1.20 and extended its slide towards 1.1950. Whether we will see further losses in this pair remains to be seen and hinges on the appetite for dollars ahead of Friday’s U.S. CPI data.

Unlike the euro, the pound sterling was able to stem the decline and rebounded against the greenback after it marked a recent support at 1.3520. Our assumption of a steeper slide following a break below 1.3540 has been shown to be false, at least for now. We still see a higher likelihood of an extended upside swing after a break above 1.3590. However, if the pound falls back below 1.3530 it may be vulnerable for a break below 1.3520. Lets us be surprised.

Sterling traders should keep an eye on important price barriers shown in the table below.

  Resistances Supports
GBP/USD 1.3590

1.3615

1.3650

 1.3520

1.3490

1.3450

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U.S. Dollar Weakness Ahead? ADP And ISM Reports In Focus

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Dear Traders,

Trading was relatively quiet Tuesday with the U.S. dollar’s latest recovery losing some momentum. After crucial support zones in the EUR/USD and GBP/USD have been tested, it seems that the euro and pound could find a bottom in the near-term.

EUR/USD: The euro strengthened against the greenback after dipping slightly below 1.17. With the 1.17-support still unbroken, our focus now turns to the 1.1820/30-resistance level which could limit gains in short-term time frames.

GBP/USD: The cable was able to stabilize above 1.3235 and we now anticipate some pullback towards 1.3340/50. For the bias to shift from bearish to bullish it would need a sustained break above 1.3460. A lower support is however seen at 1.3180.

How the dollar will trade within the next two days will mainly depend on the U.S. employment data. Today we have the ADP private payrolls (12:15 UTC) and the ISM service sector activity report (14:00 UTC) scheduled for release. Traders should pay close attention to these reports as they could determine how the USD will trade ahead of the U.S. payrolls report on Friday. Furthermore, we have another speech from Fed Chair Janet Yellen at 19:15 UTC.

Sterling traders may also keep an eye on the U.K. PMI report due for release at 8:30 UTC.

After yesterday’s quiet trading we expect higher volatility today and wish you good trades.

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Euro And Pound Depreciate Against U.S. Dollar

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Dear Traders,

Monday’s worst performing currency was the British pound which fell towards 1.3250 after weak U.K. manufacturing figures prompted concerns over the country’s health. The GBP/USD extended its slide this morning and tagged a low at 1.3229. On the other side, a stronger U.S. dollar contributed to the cable’s decline. After testing the crucial support area around 1.3230/1.32, we will shift our focus now to a significant break of that support-zone which could lead to further losses towards 1.3150 and 1.3050. With GBP/USD remaining below 1.34 we generally favor the bearish bias in short-term time frames.

The U.K. Construction PMI report is scheduled for release at 8:30 UTC, but this report is not expected to have a major impact on the pound.

The euro extended its slide against the greenback and fell towards 1.17. The U.S. dollar’s recovery was bolstered by a stronger ISM manufacturing sector activity index, which hit a 13-year high. As mentioned in our yesterday’s analysis we still wait for a significant break below 1.1680 in order to anticipate further losses in the EUR/USD.

There are no major economic reports scheduled for release today, so the price action could hinge on the appetite for dollars.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Sterling Traders Focus On U.K. CPI Data

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Dear Traders,

We have seen a bit of a bearish reversal in EUR/USD Monday with the U.S. dollar recovering against the euro. Although yesterday’s slide in EUR/USD does not automatically mean that there will be a trend reversal, it should be noted that the technical picture may promise more downside momentum to come. If the euro falls below 1.1920 and further 1.1885 we could see a slide towards 1.1830. On the topside, buyers in the EUR/USD would first need to push the pair above 1.2030 in order to focus on higher targets at 1.21 and 1.2170.

The British pound ended the trading day virtually unchanged against the greenback with GBP/USD remaining confined to a narrow trading range between 1.3225 and 1.3160. Traders await the U.K. CPI report, due for release at 8:30 UTC today and if inflation data shows an uptick in August, the Bank of England may feel pressure to turn away from its dovish monetary policy stance. This would be positive for the pound but most volatility is expected on Thursday when the BoE announces its rate decision and outlook on policy.

If the pound rises above 1.3225 we may see a run for 1.3265. We bear in mind that the August high is at 1.3268, so sellers may sweep in to sell pounds around that resistance level. On the downside, we expect a support to be at around 1.3050.

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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