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Week Starts With A Correction, Focus on ECB

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The new week began with a correction in the market with the euro giving up some of its recent gains in the early trading hours while elsewhere, crypto investors are waking up with a sore head after the latest ‘peak party’ in the biggest cryptocurrencies.

This week the focus will be on the European Central Bank decision on Thursday. The ECB is expected to keep its policy unchanged but the tone of the press conference may offer some hints on the plans to pare back monetary policy support. However, a full assessment of the pace of asset purchases will not happen until June, so it’s probably too soon for a debate about a policy shift and bond-buying to be tapered.

EUR/USD

After the euro failed to overcome the 1.1995-barrier, we saw the pair correcting its recent gains. We expect further losses towards 1.19 ahead of the ECB decision. If the euro falls below 1.1890, we will turn our focus to a lower support area which ranges from 1.1875 to 1.1835 (orange ellipse). On the upside and ahead of Thursday’s ECB decision, euro bulls could wait for a break above 1.2060 in order to buy euros towards 1.21 and 1.2170.

The pound sterling rebounded against the U.S. dollar as the U.K. economy is building up momentum while restrictions ease further. The Bank of England anticipates a rapid recovery with almost two thirds of adults in the U.K. immunized against the coronavirus.

Taking a look at the technical picture in the GBP/USD we see the pound breaking out of its recent downtrend channel, heading towards 1.3850. Above 1.3850 we focus on a higher target at 1.3915 where we see a short-term resistance for sterling bulls. Above 1.3920 the focus turns to the crucial 1.40 resistance. A short-term support is however seen at 1.3750.

Have a good start to the new week!

 

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First Fed-move expected in September – Focus now on ECB

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Dear Traders,

While sterling bears had to struggle with multiple short-entries, making it a strenuous trading day, euro trader’s efforts paid off. The euro traded lower on stronger U.S. data and hawkish comments from Janet Yellen, providing euro bears many green pips.

Yellen is optimistic and expects U.S. growth to strengthen over the rest of 2015. She said that “every FOMC meeting is a Live meeting”, which means that the Federal Reserve could raise rates at any meeting. She stressed that the pace of policy tightening is more important than the timing of the first rate increase. In other words, a September liftoff is still possible, increasing the demand for U.S. dollar.

Greek parliament approved new austerity measures

229 members of the 300-seat parliament in Athens accepted the agreement with creditors, paving the way for more emergency funds. The focus shifts now to the European Central Bank which must weigh the level of emergency liquidity assistance (ELA) in order to help Greek banks to re-open after more than two weeks.

The ECB will also decide on monetary policy at 11:45 GMT followed by the ECB Press Conference led by Mario Draghi at 12:30 GMT. Before the ECB decision, it should be important to watch the release of Eurozone Consumer Prices at 9:00 GMT. If data fails to meet the market’s expectation, it could lead to a strong reaction in the EUR/USD.

Furthermore, Fed Chair Janet Yellen delivers her testimony at 14:00 GMT along with the release of the Philadelphia Fed survey.

Today is our last trading day before our summer holiday break.We will leave for summer holiday from tomorrow until 31/07/2015 and will resume the signal service on August 3rd.

Until then we wish you successful trading and enjoyable summer days.

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ECB Interest Rate decision & Crimea Crisis

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Dear Traders,

we hope you had a good start in March 2014. Yesterdays’ trading was formative by short trends which is due to the current Ukraine Crisis.

On Thursday market strategists will listen to the ECB rate decision, where most economists expect that the ECB won’t lower its current interest rate this week. This expectation is probably priced into lately up trends.

Furthermore there are various important news release on tap this week:

  • Wednesday – Services PMI – GBP, ADP Nonfarm Employment change & ISM Non-Manufacturing PMI –USD
  • Thursday- Interest Rate decision GBP & EUR
  • Friday – Nonfarm Payrolls and Unemployment rate USD

So, this will be an interesting first week of March.

These are the current resistances and supports of EUR/USD and GBP/USD:

EUR/USD

Resistance @ 1.3800/10

Support @ 1.3700/ 1.3655/ 1.3600

GBP/USD

Resistance @ 1.6720/60

Support @  1.6630 and 1.6490

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We wish you good trades and many pips!