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Euro Gains Despite Dovish ECB

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While the GBP/USD ended yesterday’s trading day virtually unchanged, leaving us without any sustained profit, the EUR/USD climbed towards 1.1870 and provided some profit for euro bulls.

The European Central Bank’s new strategy of allowing inflation to overshoot the ECB’s  2 percent target for a while points to a more expansionary bias for monetary policy. The new formulation of “2 percent inflation target is not a ceiling” gives the central bank room to run accommodative monetary policy for longer. While the new symmetric inflation target can be perceived as a dovish disposition, the euro gained after the announcement.

Elsewhere, the DAX experienced a sharp drop towards 15300. We saw the index breaking below the ascending trendline at 15450, as well as below the recent sideways trading range.

The next support is seen at 15280 and if the DAX is unable to overcome the 15500-Level, we may see a drop below that support with a next lower target at 15100.

Beautiful weekend everyone.

 

Summer is in the markets and given a lower-liquidity backdrop across many markets during the summer months the potential for range-bound conditions is high. We therefore recommend traders staying on the sidelines during these low-liquidity periods, taking a break from the markets and adjusting risk exposure. The next major risk event will be later in the summer with the Jackson Hole Economic Symposium August 26-28.

We will take our annual summer trading break from August 2 to August 20 but will adjust risk exposure even in the month of July.

We wish you good trades!

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No Major Movements Following The ECB Statement

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And in the end, there was nothing to gain for traders on Thursday amid relatively lower readings of volatility in the market. While we had hoped for larger market movements, the ECB statement failed to trigger a major market response, dashing traders’ hopes for larger profits.

The statement was slightly more dovish than expected with the ECB coming up with a pledge to step up the pace of their PEPP bond purchases over the next quarter to keep rising yields from derailing the region’s economic recovery. As for inflation, President Christine Lagarde added that while inflation could hit 2 percent by the end of the year, the ECB will look through this.

The DAX briefly jumped to the upper bound of its recent consolidation range between 14600 and 14500 but no crucial price breakout followed.

The EUR/USD broke above 1.1960 but came under pressure following the ECB’s decision to step up the pace of its PEPP purchases. At the end of the day however, euro bulls cheered the slight upgrade in the near-term growth expectations with ECB officials agreeing that risks to the outlook have become more balanced. Bullish momentum was however not enough to push the pair above 1.1990 in the aftermath of the ECB decision day.

However, today is a new trading with new opportunities and next week we will have the Federal Reserve meeting with an update of its economic projections. So, we might get some interesting trading chances in the coming days.

We wish everyone good trades and a peaceful weekend!

 

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Daily Forex Signals

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Dear traders,

The euro did not surprise traders and rallied after the European Central Bank decided to keep interest rates and stimulus efforts unchanged. However, the 1.2170-mark proved to be challenging – as expected – and the euro bounced off that short-term resistance level.

As we wrote in yesterday’s post, chances are still in favor of the bulls but be careful – gains could be limited.

While maintaining the ECB’s stimulus after the December boost is good news, ECB President Christine Lagarde warned that the euro-area economy is headed for a double-dip recession.

The resilient euro doesn’t seem to confirm these warnings.

Have a beautiful and healthy weekend everyone!

Daily Forex Signals:

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EUR/USD

Long @ 1.2180

Short @ 1.2135

GBP/USD

Long @ 1.3715

Short @ 1.3665

DAX® (GER30)

Long @ 13920

Short @ 13840

 

Results 2020:

December 2020: +318 pips

November 2020: +75 pips

October 2020: +432 pips

 

We wish you good trades!

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ECB Pushes Euro Higher While Pound Traders Prepare For No Brexit Deal

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And finally, the European Central Bank has helped push the euro to an intraday high at 1.2159. Although the upward move failed to be as big as we had hoped for when we set our profit targets, euro bulls were able to take some smaller profits at the end of the trading day.

The ECB added, as expected, 500 billion euros and nine months to its bond-buying program but said that additional stimulus may not be needed in full. The relatively restrained comments on how much stimulus will ultimately be deployed have been the trigger for the upward move.

As for the appreciation of the euro, ECB President Christine Lagarde stated that the central bank will carefully monitor the euro’s exchange rate.

The EUR/USD broke above the upper border of the bull flag at 1.2130 and we prepare for a continuation of the euro’s rally – provided that the euro takes out the recent high at 1.2177. A next target could be at 1.2250, whereas the 1.2120-00 area could serve as a short-term support.

Elsewhere, the British pound fell to a low of 1.3245 as Brexit negotiations are on course to end without a trade deal. While market participants prepare for no trade deal after Brexit, it is possible that the two sides could agree on a “friendly no-deal”, allowing talks to resume later in 2021.

We now focus on a trading range in the GBP/USD between 1.3420 and 1.3130.

We wish everyone a beautiful weekend.

 

We wish you good trades!

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U.S. Dollar Takes A Breather While Euro And Pound Recover Slightly

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Dear Traders,

We got what we have been looking for: A breakout of the cable’s narrow trading range. While an initial attempt to buy sterling above 1.2235 proved unsuccessful, breakout traders were later able to profit from the pound’s sharp drop towards 1.2080. Sterling tumbled before BoE Governor Carney’s testimony to the House of Lords Tuesday but bounced back from its fresh low of 1.2082 as Carney said there were limits to the Monetary Policy Committee’s (MPC) willingness to look beyond an overshoot of their inflation target. In other words, his comments on inflation mean that further easing is unlikely in the near term, highlighting policy makers’ concerns about the risk of stagflation, which arises from the depreciation of the pound.

Carney’s recent comments suggest the MPC will stick to the sidelines at the next ‘super Thursday’ event on November 3.

Technically the pound remains confined to a recent 100-pips trading range between 1.2250 and 1.2150. Above 1.2250 it could head for a test of 1.2320 whereas a break below 1.2130 may drive the GBP/USD to fresh lows around 1.2050.

The EUR/USD however, failed to show larger movements yesterday and remained stuck between 1.09 and 1.0850. It was the second consecutive trading day on which none of our signal entries was triggered. European Central Bank President Mario Draghi defended the ECB’s easy monetary policy but conceded that low interest rates are not ‘costless’ for the eurozone and policy makers “certainly prefer not to have to keep interest rates at such low levels for an excessively long time”. Draghi’s ‘neutral position’ drove the euro higher but gains were capped at 1.09 for the time being. We are still looking for a significant break above 1.09 but any upward movements could be on a shaky footing as a next resistance is seen at 1.0950.

There are no major economic reports scheduled for release today. The only reports come from the U.S. and will be Advance Goods Trade Balance at 12:30 UTC, Services PMI at 13:45 UTC and New Home Sales at 16:00 but none of these reports is expected to have a major impact on the greenback.

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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No Clarity On The ECB’s QE Program, Next Decision To Be Made In December

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Dear Traders,

Mario Draghi refused to provide any clear information on what the ECB plans to do in the coming months, leaving investors suitably disappointed. Neither did he refer to tapering nor to extending the ECB’s QE program. The only takeaway that we got from yesterday’s ECB meeting is to wait and to come back in December and see what the central bank thinks then. Nonetheless, Draghi’s stance could be described as somewhat more “dovish”, noting that there is no “convincing upward trend” in underlying inflation, suggesting that the ECB might announce an extension of its bond buying program, rather than a taper at their policy meeting December 8.

Market participants sent the euro on a roller coaster ride before it ended the trading day significantly lower against the greenback. During the Asian session the euro slightly broke below 1.09 and we now wait for a significant break below 1.0880 in order to sell euros towards the next support level at 1.0820/1.08. Current resistance levels are seen at 1.10 and 1.1050.

There was little consistency in the performance of the British pound yesterday. While the currency remains vulnerable to further losses given the troubled picture of the eventual Brexit negotiations at the EU summit, it remains a sell on rallies. We now focus on a downside break below 1.22 or on the other hand, an upside break above 1.23.

Apart from the EU summit there are no major economic reports scheduled for release today. We recommend not investing your weekly profits today and wish you a wonderful 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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After The ECB Is Before The ECB

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Dear Traders,

As expected, the European Central Bank kept rates unchanged but it also refrained from making any changes to its asset-purchasing program for now. ECB President Mario Draghi merely reiterated that the ECB has the ‘full mandate’ to redesign QE, leaving the door open for additional stimulus. The market’s reaction to the announcement was thus rather subdued. The euro peaked at a high of 1.1327 but was not able to hold onto its gains. We see a resistance zone between 1.1350 and 1.14 and as long as the euro remains below that zone we maintain a neutral stance in the EUR/USD. If the euro drops below 1.1220 we see a higher likelihood of falling prices towards 1.1150.

The British pound tumbled below 1.33 but ended the day virtually unchanged against the U.S. dollar. In a nutshell, there was not much to be gained for daytraders. U.K. Trade Balance is scheduled for release at 8:30 UTC but we do not expect the report to have a major impact on the pound.

The market still lacks momentum and within that low-volatility environment we advise traders to take profits at smaller targets and secure weekly profits.

Have a wonderful weekend.

Daily Forex signals:

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

View our daily signal alerts https://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

 

 

 

Is Bullish Bias Set To Persist?

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Dear Traders,

Both major currency pairs experienced a volatile start to the new week and there was something for everyone. While bears initially set the tone, providing short-traders a good profit bulls won out against the bears at the end of the day, sending the euro and British pound higher against the U.S. dollar.

Consequently, the current sentiment appears to be strongly bullish but what is next? Let’s have a look at the technical side.

GBP/USD

Sterling still trades within a tertiary downward channel. After the recent rise the situation appears somewhat overbought so traders should generally expect increased bearish momentum in the near-term. If the pair is able to break significantly above 1.43, we see next resistances at 1.4360 and 1.44. Even if concerns about a potential Brexit have eased somewhat, the latest U.K. economic reports were not really encouraging. We therefore favor a bearish stance and focus on next resistances from where GBP may bounce back.

Chart_GBP_USD_4Hours_snapshot8.3.16

Bank of England Governor Mark Carney is scheduled to testify at Parliament’s Treasury Committee on the economic and financial benefits of EU membership today at 9:15 a.m. GMT. Carney is declined to reveal any details of the possible actions the BoE will be considering in the event of Brexit. A potential EU withdrawal fueled speculation the U.K. could fall into recession and the central bank would have to respond with a rate-cut. Traders should keep an eye on Carney’s testimony as any new insights or details could have a significant impact on the pound.

The Eurozone Gross Domestic Product is scheduled for release at 10:00 GMT but no changes are expected.

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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Cable Remains Trading Sideways – Focus On CPI

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Dear Traders,

The euro dropped below 1.1160 as ECB President Mario Draghi confirmed the central bank’s easing bias. The ECB stands ready to act in the light of recent financial turmoil and would pay close attention to the impact of renewed declines in energy prices as well as the ability of banks to transpose the ECB’s monetary policy. Draghi said “if either of these two factors entail downward risks to price stability, we will not hesitate to act”. His remarks to the European parliament indicate that the central bank could unveil further stimulus at their next ECB meeting in March. The EUR/USD traded lower in response to Draghi’s statement.

Furthermore, the OMT bond buying program returns to the headlines. The Federal Constitutional Court holds again a hearing in a lawsuit against the European Central Bank’s Outright Monetary Transactions program (OMT), a never-used bond buying program announced in 2012. If Germany’s top judges decide that the ECB is overstepping its mandate, they could restrict the central bank’s options.

The Eurozone ZEW Survey is scheduled for release at 10:00 GMT along with German ZEW Index and if figures are even lower than the expectations, the euro could accelerate its decline.

The British pound traded lower on Monday but still remained within its current trading range. U.K. Consumer prices are due for release today at 9:30 GMT and may help to determine a clear direction and increase the momentum. A sustained break below 1.4350 could drive the cable towards 1.4290, whereas a break above 1.4540 may invigorate renewed bullish momentum.

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

 

 

 

Euro Benefits As Funding Currency – Sterling Under Pressure

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Dear Traders,

The euro advanced as it plays an important role as a funding currency at times of market turmoil. Before rallying above 1.12 the common currency was able to gain ground above 1.1085. For the time being, we continue to expect the 1.1070/50-level to act as a current support-zone. On the upper side, next important price levels could be at 1.1260 and 1.1280. While many traders are wondering how high the euro may go, we should bear in mind, that a strong rise in the euro, much to the displeasure of the European Central Bank, brings policymakers on to the scene in order to talk down the currency. We expect verbal intervention by the ECB should the euro rise further.

The cable, however, declined towards its next important support-level at 1.4350. As long as Brexit concerns remain on the table, the currency is likely to remain under pressure. We expect increased bearish momentum as soon as sterling breaks below 1.4330/25. Lower targets could be at 1.4240 and 1.4180. A short-term resistance-zone is seen at 1.4450/65. Above 1.4475, sterling may climbs towards 1.4540.

Today we have second-tier data scheduled for release, which is expected to have only a minor impact on the currencies.

9:30 UK Trade Balance

15:00 USA Wholesale Inventories

(Timezone GMT)

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