dollar sell-off – MaiMarFX

Hawkish Projections Vs Dovish Pricing

June 19, 2023/in General News & Updates /by MaimarFX

Last week was characterized by bullish breakouts in the counterparts of the U.S. dollar on the back of the market’s dovish pricing. The Federal Reserve kept interest rates steady but unexpectedly delivered a hawkish surprise by projecting two rate hikes this year. The market however, doubts the Fed’s projection and is pricing in only one more rate hike this year but more importantly, it is expecting rate cuts as soon as next year. This assumption has led to the renewed sell-off in the U.S. dollar.

Market participants will be looking for further cues from Fed Chair Jerome Powell’s testimony on Tuesday and Wednesday.

On Thursday, the Bank of England is expected to raise rates by another 25bp.

The week could start off more quietly, as U.S. markets are shut today due to a holiday.

GBP/USD

The pair broke above 1.2650 and climbed another 200 pips higher, heading towards 1.2850. While the next higher target is clearly seen at 1.30, the pair is in overbought territory which increases the chances for a correction. The 1.2650-area could thus serve as a support zone in short-term time frames.

DAX

The index broke above 16330 and headed towards 16500. However, bulls took a breather at the lofty highs and send the DAX lower for a correction. We see a crucial support area at around 16150 from where bulls may take the opportunity to jump back in.

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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.

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U.S. Dollar Sells Off After Less-Hawkish Fed Statement

March 23, 2023/in General News & Updates /by MaimarFX

We got what we were looking for: A volatile price breakout with a good profit. We were able to catch a 100-pips-gain in the EUR/USD amid a broad-based sell-off in the U.S. dollar. The greenback’s move was prompted by the Federal Reserve’s softer guidance, which was less hawkish, suggesting that the central bank’s rate hike cycle is close to its end. This bearish outcome led to the sell-off in the dollar and pushed other counterparts higher in turn.

EUR/USD: Focus is now on the 1.0930-50-resistance zone. A break above 1.0960 could lead to a test of the 1.1033-February-high. A current support is seen at around 1.0750.

GBP/USD: Next hurdle lies at 1.2350, followed by the crucial 1.2450-resistance. The 1.22-area could act as a support for now.

The Bank of England is due to decide on interest rate hikes today. Any less-hawkish monetary policy decision could see sterling trade lower.

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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.

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SVB-Collapse Triggered Risk Aversion

March 13, 2023/in General News & Updates /by MaimarFX

Welcome to a new trading week. U.S. Treasury yields and the dollar tumbled in the wake of Silicon Valley Bank’s collapse last week. The market fears that there is again the risk of contagion, a deteriorating risk sentiment and a broader financial crisis. However, the Treasury Department said that it is a very different situation to 2008. If the authorities are successful in corralling contagion risks, Treasury yields and the greenback may find support. It now remains to be seen whether or not the SVB’s collapse triggers a chain reaction.

On Tuesday, the U.S. consumer price index for February is due ahead of the Federal Reserve meeting on March 22. The market had previously been leaning toward a 50 bp rate hike but now sees a 25bp move more likely. If tomorrow’s inflation data shows hotter-than-forecast results, the dollar’s recent decline may prove to be short-lived.

On Thursday, euro traders will get the next European Central Bank rate decision. The ECB is expected to raise rates by 50 bp this week. On the back of a weaker U.S. dollar, the EUR/USD is pushing higher, turning the focus to the 1.08-resistance now. Above 1.0810, we may see a run for 1.09. On the flipside the crucial support area around 1.05 remains intact.

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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Price Overshoot

November 16, 2022/in General News & Updates /by MaimarFX

The selloff in the U.S. dollar gained momentum Tuesday and led to overshooting prices in other counterparts. The British pound surged to a high of 1.2029 despite a deeply overbought situation. The euro, however refrained from testing the 1.05-level after breaking above 1.0370. Nonetheless, we saw sharp corrections in both pairs following price peaks.

We were able to catch some good profits in the midst of yesterday’s bullish momentum.

GBP/USD

Below 1.19 we expect a steeper correction towards 1.16. However, given the market’s speculation about a dovish sentiment (despite continued warnings that inflation is too high!) we may experience some extended dollar weakness. Today, U.K. inflation will be released, so let’s see what is in store for sterling traders.

Our trading ideas for today 16/11/22:

EUR/USD

Long @ 1.0410

Short @ 1.0360

GBP/USD

Long @ 1.1910

Short @ 1.1830

DAX® (GER40)

Long @ 14370

Short @ 14320

Settings for all trades today: Entries from 8:00 am UTC, SL 25,

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.

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Here Is Why The Dollar’s Sell-Off Did Not Last

September 15, 2021/in General News & Updates /by MaimarFX

U.S. inflation was less than forecast in August which is why the U.S. dollar sold off in a first response to the data. But why did the dollar dip not last and prices in the GBP/USD and EUR/USD reversed course? The answer is that inflation remains generally elevated while the 5.3 percent (YoY) headline and 4.0 percent core CPI are still far beyond the Federal Reserve target. This leaves the argument about whether pandemic-related inflationary pressures are transitory undecided. The Fed may have some more flexibility on when to start tapering but high inflation is till an argument for a more imminent taper decision.

Fed policy makers could eventually wait until December to officially announce a plan to taper asset purchases.

Technically, both GBP/USD and EUR/USD pulled back from short-term resistance zones. The cable reversed course after touching 1.3913 and is now looking at a break of 1.38. Below 1.3780, we look at 1.3730 and further 1.3650. In the EUR/USD we look at a trading range between 1.1840 and 1.1750 as long as bulls are unable to take out the 1.1850-barrier.

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