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ECB Meeting Unlikely To Move Euro Exchange Rate

Dear Traders,

It’s decision day at the European Central Bank today but whether this event risk carries much weight will depend on ECB President Mario Draghi’s comments at the ECB press conference. Traders are looking for hints on when interest rates will begin to rise but ECB policy makers suggested earlier that a rate hike won’t come at least until the end of summer 2019. If there is no change in guidance, the euro could give up some of its recent gains.

General speaking, it seems unlikely that Draghi intents to move the single currency at today’s meeting, so watch out for range-bound price action.

As for the dollar, the most interesting piece of data will be released tomorrow with the U.S. 2Q GDP.

EUR/USD: The next hurdle is now seen at 1.1750 before we turn our focus to the crucial resistance area between 1.18-1.1850. Looking however at larger time frames, the currency pair remains trading sideways between 1.1850 and 1.15.

 

Summer trading break: We are slowly preparing for our summer holiday break which means that we are reducing risk exposure while adopting a cautious approach.

Announcement: Shortly after the summer break our Chief Currency Strategist will commence her maternity leave, which is why daily analysis and signals will be paused until the end of her period of maternity leave.

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Will The Euro Rise Or Fall? Waiting For Draghi

Dear Traders,

It’s decision day at the European Central Bank and traders are eagerly awaiting ECB President Draghi’s comments. Today’s ECB meeting is a very important event as it is expected to provide clarity on the withdrawal of stimulus. The majority of analysts expect Mario Draghi to delay announcing a timetable for cutting its monthly bond purchases at this meeting. The reason is the strength of the euro which may prevent the central bank from announcing a big change in monetary policy. Moreover, improving economic conditions in the Eurozone are likely to balance out near-term concerns over the euro’s strength. Ongoing EU improvements thus give room for the ECB to forego an announcement of a QE taper. If the ECB downplays tapering, the euro could fall. In the bullish case of a surprise announcement particularly a reduction of 30 billion or more, the euro will further rise. Whatever the case, the central bank has little choice but to cut asset purchases by next year, simply because it has no more bonds to purchase. In a first step, the ECB could reduce its monthly purchases to 40 billion from 60 billion which could happen at the start of 2018.

It all depends on Draghi’s rhetoric but even in the case of a dovish announcement, the medium-term trend is towards euro strength.

The U.S. dollar, in contrast, has become incredibly oversold. So any disappointments on the Eurozone front would be sufficient to trigger a correction in the EUR/USD, even though a setback may not last very long. Let’s be surprised.

The European Central Bank decision is scheduled for 11:45 UTC, followed by the highly anticipated ECB press conference 45 minutes later.

The euro traded virtually unchanged against the U.S. dollar while the price action of the EUR/USD was limited to a tight range between 1.1950 and 1.1910. We are still waiting for breakouts of that narrow range and prepare for larger swings today. Above 1.1960 the euro could head for 1.2120. Below 1.1890 it could fall back towards 1.18 and possibly even 1.17.

We wish you good trades!

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ECB Decision: Stimulus Change Would Be Premature

Dear Traders,

It’s ECB decision day and the euro trends slightly lower against the U.S. dollar ahead of the event risk. Meanwhile, the dollar received some support by an unexpectedly robust ADP employment report which nearly doubled the 185K forecast, lifting estimates for tomorrow’s non-farm payrolls report. A Fed rate increase is therefore priced in as a near-certainty. However as certain as next week’s FOMC rate decision seems, the tightening cycle in subsequent meetings has not accelerated. Hence, the greenback seems to be unimpressed by the hawkish outlook.

Euro traders will pay close attention to comments from European Central Bank president Mario Draghi. The bar is high and investors are looking for clues as to whether the conditions are right for a stimulus change. However the central bank is not expected to signal any change in policy today as policy makers will keep QE probably going until the end of the year. Even with euro-zone inflation at 2 percent for the first time in four years, Draghi is expected to maintain a dovish bias for the time being. The ECB must very cautiously reduce the level of current stimulus and it will therefore seek to avoid unnecessary turmoil. Nevertheless, inflation forecasts are expected to be revised higher for 2017 and 2018, which is why some market indicators point to the possibility of a rate hike in 2018.

The ECB’s decision will be announced at 12:45 UTC, followed by the ECB press conference 45 minutes later.

As usual, traders should prepare for volatile swings around the time of the press conference. Technically, the euro’s downtrend remains intact with the focus being on a next lower target at 1.0515/10. The 1.05-support level could lend a strong support to the euro which is why traders should also consider possible pullbacks in short-term time frames. A current resistance is seen at 1.0550, a level where sellers might jump back in. If the euro breaks however above 1.0575 we may see further gains towards 1.0640 and possibly even 1.0670. A break below 1.0490 could increase bearish momentum towards 1.0390.

The pound sterling extended its losses against the greenback and dropped to a low of 1.2139. We still anticipate some corrections in short-term time frames, sending the pound higher towards 1.23 and possibly even 1.24. On the bottom side there is a crucial support area ranging from 1.21 to 1.20. The pound may have difficulty to break that support zone ahead of the trigger of Article 50. No date has yet been fixed for the potential Brexit trigger, which is supposed to take place before the end of March.

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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

 

 

 

Market Still Seems To Be In Its State of Summer Lethargy

Dear Traders,

Friday’s non-farm payrolls report failed to put an end to the market’s summer lethargy and instead of giving direction, most major currency pairs remained virtually unchanged after some short-term fluctuations during payrolls release. While the August jobs report came in weaker than-expected, tempering speculation of an imminent Federal Reserve interest rate hike in September, the market’s reaction to the report was restrained with both euro and cable rising only marginally. The market environment therefore became somewhat unattractive for traders since large market movements have become a rarity.

In terms of economic market moving data, there is not much going on this week. From the U.S., the only important pieces of economic data are the ISM Non-Manufacturing Index (Tuesday) and the Fed’s Beige Book (Wednesday). The most important event this week will be the European Central Bank’s monetary policy announcement on Thursday. The ECB meeting could trigger some market moves as the central bank is expected to lengthen quantitative easing for a second time. Although the ECB is not expected to cut interest rates, Thursday’s meeting is the most likely opportunity to announce more stimulus or change the QE program. We therefore expect the euro to come under pressure ahead of the announcement. Technically, we will focus on a break of the 1.1120-level in order to sell euros towards 1.1080 and 1.1050. On the upside, a break above 1.1330 could change the bias in favor of the bulls.

The British pound was able to maintain its price level around the 1.33-mark. Above 1.3350 we see chances of a test of 1.3370 and 1.34. However, any further gains could be limited until the pound’s current key resistance at 1.3480. Sterling traders should keep an eye on the Industrial and Manufacturing Production figures (Wednesday) as well as on the Services PMI report, due for release today at 8:30 UTC.

The U.S. market will remain closed for a public holiday on Monday, so we expect volatility to be low and recommend traders to take profits at lower targets given the calm market.

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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

 

 

 

How To Trade The Current Market? Not At All!

Dear Traders,

How one can trade in a market where even central bankers are unable to assess the economic situation and the need for further measures? The answer is simple: It is best to not trade at all. At least, this might be the motto of the financial markets at the moment. Traders who had hoped for some profitable fluctuations following the ECB announcement have been disappointed, once again.

The new trend among policy makers is to just admit that they are uncertain about how the big themes including Brexit and other political turmoil will affect the global economy. European Central Bank president Draghi refrained from providing new insights as the central bank has no clear picture of the impact of Brexit. He admitted on Thursday that nobody can see what the consequences might be as policy makers have not enough data to evaluate the situation right now. The mood therefore remains skeptical. The next ECB meeting is on September 8 and it remains to be seen whether the central bank has a clearer picture until then.

Looking at the technical chart we would actually assume that the euro might be primed for an upside correction but given the uncertain market sentiment all predictions of further movements could be useless. We are therefore not going to refer to the technical picture today, as there is no clear trend within a low volatile market environment.

German and Eurozone PMI reports are scheduled for release at 7:30 and 8:00 UTC but these reports are not expected to have a significant impact on the euro.

The cable’s price development ended in a narrow trading range, formatting a symmetrical triangle in the hourly chart which may predict upcoming price breakouts. With prices above 1.3245 bullish engagements could be rewarding whereas a break below 1.32 could reinvigorate bearish momentum in the short-term. Market participants will focus on the U.K.PMI report due for release at 8:30 UTC.

Although the market doesn’t offer profit opportunities at the moment, we will stay on the ball and try to make the best out of the current market conditions.

Have a nice weekend.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-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

 

 

 

The Market Has Lost Steam

Dear Traders,

Welcome to a new trading week.

Last Friday ended with non-volatile sideways moves. Both of our major currency pairs traded within narrow ranges and failed to offer traders a profitable trading environment. Generally it seems as if the market has lost steam, given the reduced expectations of a Federal Reserve tightening in 2015. In order to restore investor’s confidence, the market would need a clear signal from central bankers what to expect in the near-term. In the meantime, traders must be patient and try to profit from smaller fluctuations.

The week’s focus will be on ECB meeting on Thursday. The European Central Bank is not expected to increase stimulus this month, but expectations generally tend towards an extension of QE in the coming months. Apart from the ECB Rate Decision, the only important piece of eurozone data will be Friday’s PMI report.

There are no major important U.S. data scheduled for release this week. Some housing market reports are due for release but these reports are unlikely to determine the greenback’s further direction.

On Tuesday, traders should pay attention to speeches from Fed-chair Janet Yellen and BoE Governor Carney, which may impact on the currencies.

Finally, U.K. Retail Sales are scheduled for release on Thursday. Retail Sales are forecast to show a higher output in September and increase the chances of a break above 1.55.

We wish you a profitable trading week!

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 2015 Maimar-FX.

www.maimar.co