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Subdued Market Activity

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Dear Traders,

There was only little consistency in the performance of the U.S. dollar Thursday. U.S. Consumer prices were below expectations and as long as inflation fails to pick up, there is no call for rate increases by the Federal Reserve. Rather, the Fed may tend to be even more restrained in maintaining a hawkish stance, at least until inflation accelerates.

The recent price fluctuations in both major pairs left much do be desired for day-traders and the speculative interest was relatively muted. For now, we must wait until the risk appetite of investors increases in order to profit accordingly from new opportunities in the market.

The only interesting economic data releases could be U.S. Industrial Production, due at 13:15 GMT and University of Michigan Confidence at 14:00 GMT. Whether these reports will affect the USD remains to be seen.

EUR/USD: The euro traded between 1.1295 and 1.1230. If the pair falls back below 1.1235 we expect next crucial price levels to be at 1.1195 and 1.1170. However, if the euro climbs above 1.13 a next resistance is seen at 1.1330/50.

GBP/USD: The cable currently formatted a narrow trading range between 1.4170 and 1.4130. Above 1.4170, sterling must significantly break through 1.42 in order to regain bullish strength. Below 1.4130, the focus remains on the 1.41-mark but once this level is breached to the downside, GBP could slide towards 1.4050 and 1.40.

We wish you profitable trades and a wonderful weekend.

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U.S. Data To Help The Greenback Regain Strength?

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Dear Traders,

The British pound extended its gains towards 1.4350 after CPI data came in stronger than expected, reaching the highest level since December 2014. Nonetheless, the pound was not able to maintain the high price level and finally ended the day unchanged against the U.S. dollar. Our focus now shifts to the next support level at 1.4225. In case of a break below 1.4225, lower targets are seen at 1.4207, 1.4195 and 1.4170. The market’s attention is focused on U.S. Retail Sales, scheduled for release at 12:30 GMT and as the figure is a significant market mover and expected to show a rise in March, market participants might be inclined to be bullish on USD ahead of the report.

The euro peaked at a yearly high of 1.1465 before prices quickly reversed direction and dropped back to below 1.14. The attention is now directed to the lower band of the euro’s current trading range. A break below 1.1335 could boost bearish momentum and send the euro towards 1.13 and 1.1285. Below 1.1280 we expect the euro to decline toward the 1.12-level. However, in case of renewed upward momentum, we will pay attention to current resistance levels at 1.14 and 1.1430 but bullish movements exceeding these levels could be limited until 1.1470.

The U.S. Retail Sales report will be the most important piece of economic data today and Industrial Production figures from the Eurozone (9:00 GMT) and the Fed’s Beige Book (18:00 GMT) could thus take a backseat.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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British Pound Advanced On Risk Appetite While The Euro Trades Motionless

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Dear Traders,

The best performer was the British pound which climbed towards 1.43 and provided sterling bulls a good profit. As already assumed in yesterday’s analysis the odds seemed to be in favour of an upswing although there were no fundamental drivers supporting the bullish bias. Speculations about higher inflation could have been a possible reason for the pound’s recent price rice. Inflation accelerated to 0.4 percent annually in March from 0.3 percent in February, forecasts show. U.K. Consumer Price Indices are scheduled for release today at 8:30 GMT and if data are in line with expectations, sterling could begin to give up its gains as a slight uptick has already priced in. Traders should bear in mind that the outlook for the pound remains fragile as long as uncertainty dominates the currency ahead of the EU referendum in June. However, given the recent upward movement the cable may also extend its gains towards 1.4325 and 1.4365, provided GBP is able to break through the 1.43-barrier. On the bottom side we expect the 1.4175-level to lend a short-term support for the currency pair.

All quiet in the EUR/USD. This has been the motto for euro traders as the euro’s sideways movement provides nothing but losses. The current resistance at 1.1450 proved to be intact while the 1.1372 prevented prices from falling. Amidst the sideways trend, breakout traders searched in vain for any profitable trading chances and struggled with false breakouts. However, we know that a sideways trend with fluctuations confined to a narrow band usually does not last very long. We are therefore looking for upcoming breakouts of that narrow trading range.

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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.

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Risk-Aversion Leads To Sideways Trends

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Dear Traders,

There is not much news to report on the currency market. The performance of both major currency pairs showed only little consistency Thursday, although we saw a slight shift towards the U.S. dollar. However, any attempts to sell both euro and cable have not been paid off. The unsteady fluctuations can be attributed to risk-averse investors who stayed at the sideline as market-moving data is lacking.

The gathering of  the four Federal Reserve chiefs Janet Yellen, Ben S. Bernanke, Alan Greenspan and Paul Volcker did not deliver any new insights into the Fed’s guidance. Yellen said “We are coming close to our assigned congressional goal of maximum employment”, even though she still sees some slack remaining in the U.S. labor market.

With no market-moving news we expect both currency pairs to trade sideways within the frequently discussed price levels. The only piece of economic data scheduled for release today will be U.K. Industrial and Manufacturing Production numbers (8:30 GMT). If data comes in weaker than forecast, the pound could drop below its current support at 1.4045. The focus will then shift to the 1.40-barrier and in case of a break below 1.3985 GBP could make a move towards 1.3920. Any pullbacks, however, could be limited until 1.4110 and 1.4150.

Have a nice weekend.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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Will Draghi Liberate The Euro From Its Narrow Trading Range?

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Dear Traders,

We can call the latest FOMC minutes a non-event for traders as the minutes revealed nothing fundamentally new. Several Federal Reserve policy makers argued against an April interest rate hike while some favored it. Although the minutes reflect inconsistency in terms of the timing of rate hikes, the Fed’s fundamental stance remains more hawkish than dovish. All Fed officials agreed on the relative health of the U.S. economy amidst persistent global risks. Nonetheless, several officials advocated a cautious approach as they worried that slowing global growth could hurt U.S. exports and reduce corporate investments.

While market participants see no chance of an April hike the odds increase slightly for a June hike but first top 50 percent for a rate increase in December. The market has a difficulty in pricing in rate hikes for 2016 but if future U.S. data show that the economy continues to improve, the dollar will begin to rally.

The British pound confirmed its bearish bias and showed that there is still room for a further decline ahead of the upcoming U.K. referendum in June. The currency pair tested the 1.40-support but was able to recover most of its losses towards the end of the day. For any bullish engagements the 1.4175-level should be of primary interest as a break above that level could send the pound towards 1.4230. However the trend is down and if GBP falls back below 1.4080, we could see another dip lower.

The euro is still captured between 1.1430 and 1.13 and every attempt to break significantly above 1.14 has resulted in a reversal. Once the 1.1440-level has been breached to the upside we might see an attempt to test the 1.1480/1.15 level. However, if the pair remains below 1.14 we will favor a bearish stance and focus again on a break below 1.1335 and further 1.13. A break below 1.1285 could drive the euro as low as 1.1240/20.

Chart_EUR_USD_4Hours_snapshot7.4.16

The most important risk event for the euro will be the speech by ECB President Mario Draghi in a meeting at the Council of State in Lisbon, Portugal. The speech is scheduled for around 14:00 GMT. The risk for the euro is to the downside as Draghi might take the opportunity to put pressure on the common currency.

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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

 

 

 

The Lack Of Market Moving Data Could Result In Sideways Motion

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Dear Traders,

Friday’s U.S. labor market report showed that the economy is still performing well overall. While the unemployment rate rose to 5 percent from 4.9 percent as more people entered the labor force, closely-watched average hourly earnings increased 0.3 percent. The uptick in wages and a solid 215k gain in payrolls add confidence that the U.S. economy will hold up against slowing global growth. The U.S. dollar strengthened in response to the report but gains were limited in the EUR/USD, whereas the cable came under increased pressure on the back of a weaker manufacturing PMI and amid concern that economic and political uncertainty could deter investment inflows from overseas.

As expected the short-term uptrend in the British pound has been reversed and the focus returns to the next support levels at 1.4150 and 1.4050. Short-traders efforts paid off last Friday as our short-entry proved to be profitable and reached our target of 90 pips. Before shifting our focus to next support zones at 1.4140 and 1.4120, the cable must break below 1.4170. After a break below 1.41 a next important support is seen at 1.4050. On the topside we expect upward movements to be limited until 1.4320 and 1.4345.

The euro marked a current resistance around the 1.1440-level. With a renewed break above 1.1415 we might see another test of that resistance level followed by a rise towards 1.1460 and further 1.15. Remaining below 1.14, we expect the 1.1350-level to lend a short-term support to the euro. However, below 1.1335 the focus will shift to the 1.13-barrier.

This week’s economic calendar is relatively light in terms of market moving data. Apart from the FOMC minutes on Wednesday we get some speeches from Fed Presidents throughout this week as well as a speech by ECB President Mario Draghi, scheduled for Thursday. The only important piece of U.S. data will be the ISM Non-Manufacturing index, due for release on Tuesday.

Sterling traders should pay attention to Tuesday’s PMI reports as well as Manufacturing and Industrial Production figures, due for release on Friday.

Today, the U.K. Construction PMI, scheduled for release at 8:30 GMT could have an impact on the British pound.

The FOMC minutes are not expected to be a big market mover as Fed Chair Janet Yellen has just reiterated the Fed’s approach to proceed cautiously in raising interest rates. Given that cautious outlook, the dollar could thus show further signs of weakness.

We wish all traders a good start to this week and many profitable trades.

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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.

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U.S. Dollar Suffers Losses After Yellen Sends Dovish Message

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Dear Traders,

While dollar bulls may have hoped for salvation before Yellen’s speech in New York, the chair indoctrinated the market with a dovish message and stressed the need for a cautious approach. Yellen stated detailed conditions investors need to watch for future rate hikes. These conditions contain the stabilization of commodity prices and foreign economies. Furthermore she stressed the importance of a strong dollar, which would depress inflation and exports if it appreciates further.

The most dovish line was when Yellen said that the committee “would still have considerable scope” to ease policy if needed, smashing down the latest hawkish comments from Fed officials pointing to the possibility of a rate hike in April. The Fed chair said it was appropriate to “proceed cautiously” and reiterated that the Fed is not following a pre-set course of rate hikes, but will act when conditions are right.

On the bottom line we can say that there is not much hope for the U.S. dollar to show signs of recovery in the near-term. Yellen’s dovish message diminished rate hike expectations for 2016, changing the odds in favor of a December rate hike or even later.

As expected in yesterday’s analysis, the euro headed for a test of 1.13 after breaking above 1.1260. We expect the euro to continue its bullish bias and focus on a break above 1.13 and further 1.1340. If the euro is able to climb above the February high of 1.1376 we see a next resistance at 1.1430/50 before facing the 1.15-barrier. Current supports are seen at 1.1250 and 1.1220.

The British pound responded with the most volatile upswing, jumping more than 130 pips from our long-entry. As stated in yesterday’s analysis the pound could be vulnerable to losses after peaking at 1.44/1.4430. However, a break above 1.4450 could send sterling towards 1.45. On the bottom side we expect the 1.43-level to lend a current support to the GBP/USD.

Traders should pay close attention to important economic data, such as the German CPI, scheduled for release at 12:00 GMT followed by the ADP report 15 minutes later.

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 2016 Maimar-FX.

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Low Volatility Fails To Provide Profitable Environment For Traders

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Dear Traders,

There was little movement in the finical markets with the euro and British pound being uninfluenced by any hawkish Fed speak and U.S. economic data. Despite hawkish comments from Atlanta Fed President Dennis Lockhart and San Francisco President John Williams saying that recent economic data may justify additional policy tightening there was no appetite for U.S. dollars. Neither did weaker U.S. existing home sales numbers affect the greenback negatively.

Volatility has been very high during the last two weeks and many investors and day traders have locked up a good profit which is why many investors prematurely went on vacation or now refrain from taking any positions ahead of the Easter holidays. This week we expect volatility to remain moderate with traded volumes being subdued. Traders should therefore not expect too much and take profits at smaller targets.

The EUR/USD refrained from trading below the 1.1230-level but does not seem to favor the upward trend, either. A current resistance is seen at 1.1285, whereas short-traders should pay close attention to a break of the 1.1220-1.12 support. The German IFO and ZEW surveys are due for release today and forecasts point to an increased confidence. Positive numbers may lend support to the euro’s bullish bias.

Trading the GBP/USD yesterday has offered us nothing but losses. The cable marked a recent support at around 1.4360 whereas upward movements were limited until 1.4430. We see next important support levels at 1.4335 and 1.4310 which have to be breached in order to reinvigorate fresh bearish momentum. U.K. Consumer Prices are due for release at 9:30 GMT and if data provides a positive surprise we could see sterling strengthening towards 1.4450 and 1.45.

9:00 EUR German IFO Business Climate

9:30 UK Consumer Prices

10:00 EUR German ZEW Survey

13:45 USA Markit Manufacturing PMI 

(Time zone GMT)

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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.

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Have Euro And Cable Peaked?

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Dear Traders,

The U.S. dollar has depreciated against most major currency peers after the Federal Reserve lowered expectations for the path of interest rate increases in 2016. The British pound surged to a fresh one-month high after the Bank of England left interest rates unchanged. The 1.45- level will now be crucial for the currency pair. Once GBP breaks above 1.4515 we see next resistances at 1.4545 and 1.4580. On the bottom side there could be a current support zone around the 1.43-level.

EUR/USD

The euro climbed above 1.13 and marked a new high at 1.1342. The big questions now is whether the euro will extend its gains even further but looking at the four-hour chart we see a major resistance at 1.1370/75 that could limit gains in the pair. However, in case of a break above 1.14 the next important resistance level is seen at 1.15. On the bottom side, we will turn our focus to a downside break of the 1.1275-level which could increase bearish momentum towards 1.1240 and 1.1160.

Chart_EUR_USD_4Hours_snapshot18.3.16

We had a successful week and therefore recommend traders not to reinvest their weekly profits and even consider a trading break today. So we will stay risk-averse and save our profits.

Michigan Confidence due for release at 14:00 GMT is the only important piece of U.S. data today.

We wish everyone a beautiful weekend!

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 2016 Maimar-FX.

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Dollar Weakened On Dovish Fed Statement

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Dear Traders,

The FOMC statement came in slightly more dovish than markets had expected, predicting two quarter-point rate increases by the end of this year. The Federal Reserve’s stance was generally friendly and while policy makers are still looking for two rate hikes in 2016 the statement pointed to risks to global economic growth, citing the impact from global risks on the U.S. economy. The market’s reaction to the Fed’s statement suggests that expectations were somewhat more bullish, focusing on the “dot-chart” of interest-rate forecasts which finally represented only two rate hikes instead of the expected three hikes this year. With regard to the so-called “dot plot” projections which were recently of considerable importance, Yellen tried to downplay the significance of those forecasts saying that they are neither a present plan nor a commitment.

On the bottom line, the Fed maintains its hawkish monetary policy stance even if the pace of further tightening slightly slowed. The probability of a rate hike in April is currently at 15 percent whereas economists see a 42 percent-chance of a rate increase in June.

Both euro and British pound benefitted from the dovish statement and rose towards next resistance levels. The EUR/USD bounced back from the next resistance level around 1.1250 but was able to remain above 1.12. For euro traders it was yet another day of huge profits and our monthly performance increased by 100 pips to 304 pips profit. Technically we see a next hurdle at 1.1280 before heading towards a test of 1.13 but traders should bear in mind that the euro is generally not the most attractive currency and can quickly give up on its gains as soon as risk appetite declines. Euro bears should wait for a break of 1.1050 and 1.10.

The British pound climbed towards 1.43 on the back of broad-based dollar weakness. Whether the pair will be able to break above 1.43 remains to be seen. However, concerning the technical picture the bias remains bearish and we will focus on current resistance from where the pound may bounce back.

The Bank of England will announce its monetary policy statement including the rate decision today at 12:00 GMT but no changes are expected. Let us have a look at the technical outlook.

GBP/USD

Looking at the daily chart we see that the overall trend is bearish and that the recent upward move can yet be considered as correction within a downward trend. With a break above 1.4310 next resistances are seen at 1.4375 and 1.44. We expect the 1.4515- 1.4580 area to be a key resistance for the currency pair. Consequently we favor the downward trend sending sterling back towards 1.4040 and 1.40.

Chart_GBP_USD_Daily_snapshot17.3.16

Further important economic data for today:

10:00 EUR Eurozone Consumer Prices

12:00 UK Bank of England Rate Decision

12:30 USA Philly Fed Index

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 2016 Maimar-FX.

www.maimar.co