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Profitable Trade: Euro Rises On ECB Rate Hike Bets

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While it was a highly profitable ‘bullish’ trading day in the EUR/USD, the GBP/USD lagged behind and provided more fake-outs than break-outs.

The market has been overly-aggressive in terms of Bank of England rate forecasts which was evident in the cable’s latest upward move towards 1.3750. The BoE raised rates as expected while the central bank’s forecast suggests further hikes are now likely in March and May with the risk of a further move in August. This hawkish outlook was however nothing that the market has not already been priced in and thus, the GBP/USD failed to generate large market moves yesterday. Governor Andrew Bailey even cautioned against thinking “rates are now on an inevitable long march upwards.”

The situation was different and much more profitable in the EUR/USD. We went long at 1.1310 and took profit at 1.1410. The euro broke out of the technical rectangle (our analysis from 3/2/22) and started its run towards 1.1480. Reason for the bullish breakout were bets on an ECB rate hike in 2022 while ECB President Christine Lagarde spoke. She refused to repeat that a rate hike was very unlikely this year. This is interpreted as less dovish and pushed the euro upwards.

Today we will have the U.S. nonfarm payrolls report on tab at 13:30 UTC but we will stay on the sidelines ahead of the report and save our weekly profits.

Have a good weekend everyone!

 

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Off To A Good Start

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The trading week started profitable.

EUR/USD: We have already reached our bullish target at 1.1220 and secured a good gain (we went long at 1.1175 yesterday).

Next price levels to watch out for: Above 1.1290 chances are slightly in favor of the bulls with higher targets seen at 1.1350 and 1.1380. If the euro, however, falls back below 1.12 (and further below 1.1180) sentiment changes in favor of the bears with lower targets seen at 1.1050 and 1.10.

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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ETH/USD

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U.S. Dollar Weakness Continues

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Dear Traders,

The U.S. dollar’s weakness continued while there was nothing to prevent the euro and pound from further rising against the greenback. The British pound was able to stabilize above 1.40 on the back of positive Brexit-related news and climbed back up towards 1.4150.

The euro rose in tandem with the pound after stabilizing above 1.2455.

Given the strong uptrend in both EUR/USD and GBP/USD we could possibly see further gains but traders should be careful and watch out for potential corrections in the near-term.

EUR/USD: The euro took out the 1.25-hurdle and seems to be primed for a clear breakout above its recent trading range with the upper barrier being at 1.2540. Next hurdles could come in at 1.26 and 1.2640. While traders now may favor the upward direction, we will also pay attention to possible pullbacks towards 1.25, 1.2450 and 1.2370.

GBP/USD: The pound experienced a parabolic rise towards 1.4150 while that next barrier could serve as a make-it or break-it level. If the pound breaks the 1.4150-level significantly it could further rise towards 1.4270 and 1.43. Below 1.4065 however, bearish momentum could accelerate driving the pair back towards a test of 1.40.

It all depends on the market’s risk appetite. From a fundamental perspective, there are no major reports scheduled for release today.

Have a wonderful weekend.

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We wish you good trades and many pips!

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EUR/USD Approaches 1.1860, Next Target At 1.1905?

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Dear Traders,

As expected, there was little movement in the Forex market with U.S. markets closed for the Thanksgiving holiday. These quiet conditions may continue today which is why we advise traders not to expect too much from the market and better stay out of new engagements or take profits at smaller targets.

EUR/USD: The euro traded with a tailwind and rose towards 1.1860. Once that level is breached we may see the euro extending its gains towards 1.1895. We bear in mind that the next crucial resistance level comes in around 1.1905. As long as the pair remains above 1.1770 the near-term bias is considered slightly bullish.

GBP/USD: The cable rejected the 1.3340-barrier and dropped back below 1.33. We now expect a near-term support to come in near 1.3265 from where we may see some leg up. Once the cable breaks above 1.3340 we anticipate further gains towards 1.3370 and possibly even 1.34. However, we recommend taking a cautious approach to markets that are illiquid.

Have a nice weekend!

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We wish you good trades and many pips!

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EUR/USD: 1.19 Could Be A Make-It Or Break-It Level

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Dear Traders,

Yesterday was dominated by a weakening U.S. dollar, which extended its slide against the euro and British pound after the market interpreted the FOMC minutes as slightly dovish. While Fed policy makers see another rate hike this year, many issued concern that low inflation was not a temporary phenomenon. The priced-in probability of a December rate hike is still unchanged around 75 percent but if Fed officials believe that inflation could stay low for longer, then they might be less inclined to stay committed to a steep rate hike path in the future. The minutes were neither more dovish nor more hawkish but market participants interpreted the increasing concern about inflation as dollar-negative.

The focus now shifts to tomorrow’s U.S. Consumer price report, which, if positive, could boost the dollar.

EUR/USD

The euro rose steadily up to a high of 1.1878 and the linear movement seems quite an atypical performance of the market. The 1.19-level could now serve as a ‘make-it’ or ‘break-it’ barrier. If the euro is able to break significantly above 1.1910, we expect further gains towards 1.20 and possibly even the September high of 1.2092. If the price, however, remains below the 1.19-barrier, the euro could start giving up some gains and may fall back towards 1.1780. Moreover, we bear I mind that the RSI index approaches overbought territory, a situation that could limit near-term gains in the euro.

ECB President Mario Draghi will hold a speech today at 14:30 UTC in Washington and if he touches on monetary policy the euro could respond to his comments with volatile swings.

The GBP/USD traded range-bound between our entry levels at 1.3235 on the upper and 1.3175 on the lower side. During the Asian trading session, the pound sterling was finally able to break above 1.3235 and rose to a high of 1.3265. As mentioned in previous analysis, we expect a next resistance near 1.33 and this level could be crucial for the future price development in the cable.

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Profitable Trading For Euro Bulls, Now What?

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Dear Traders,

There was nothing stopping euro bulls from pushing the euro beyond 1.20 despite the absence of changes in the ECB’s monetary policy. The euro owes its recent appreciation in large part to the further improved outlook for economic growth in the Eurozone. The European Central Bank upgraded its forecast for growth this year to 2.2 percent, which is the fastest pace in a decade. While the ECB refrained from reducing asset purchases this time, Mario Draghi did suggest that decision on the quantitative easing program (QE) could be made next month. The strength of the EU economy has prompted the market to discount a policy shift, which is most obvious in the strong uptrend of the EUR/USD. While the currency pair has already charged remarkably high, the level of intervention rhetoric from the ECB was too mild to prevent euro bulls from pushing the single currency higher. Moreover, when coming to the currency’s sharp appreciation, Draghi didn’t seem overly concerned.

In other words, there was nothing in the way of further euro strength since the ECB will start tapering and if not today, then certainly next time.

Furthermore, the U.S. dollar continues its downtrend. Market participants are concerned that the impact from Hurricane Harvey and now Irma are causing data distortions, and thus, undermine the chances of a year-end Federal Reserve rate hike.

EUR/USD

We got what we have been looking for: A breakout of the euro’s narrow trading range. Our yesterday’s long entry has proven to be sustainably profitable. We now focus on a next target at 1.2135, from where we may see some pullback. On the downside, we expect the 1.20-area to lend a support for the time being. However, bear in mind that the pair approaches overbought territory, a fact that increases the chances of a reversal.

GBP/USD: The pound sterling headed for 1.3150 on the back of broad-based dollar weakness. Sterling bulls were able to gain a good profit by using our long entry at 1.3061. Once the cable breaks above 1.3165 we will shift our focus to the August high near 1.3270. Important supports are seen at 1.3050 and 1.30. Traders should keep an eye on the U.K. data (Industrial Production, Trade Balance) at 8:30 UTC.

We wish you good trades and a nice weekend!

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We wish you good trades and many pips!

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Will The Euro Rise Or Fall? Waiting For Draghi

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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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We wish you good trades and many pips!

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Profitable Trading Week: Secure Your Profits And Lean Back

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Dear Traders,

Things turned out differently than many market participants had hoped. Almost everyone was expecting a very dovish tone from European Central Bank President Draghi but what we got, was a neutral Draghi who talked up the EU economy, saying officials will reassess stimulus in autumn. His remarks that the economy is finally enjoying a robust recovery outweighed concerns about the rise in the common currency. The market fully ignored Draghi’s assertion of the need for continued accommodation and pushed the euro to its strongest level in 23 months.

Investors will have to get used to the prospects of less ECB stimulus even though no decision has been made on timing or form of any tapering yet. Draghi only signaled the ECB would discuss its bond purchase program in the autumn.

The euro rallied to a fresh high of 1.1658 and many analysts already expect the euro rising toward higher targets at 1.17 and even 1.20. Time will tell.

The cable tumbled back below the 1.30 level as initial Brexit talks did not produce a breakthrough on any of the key issues between the UK and EU. Our short entry at 1.3015 has proved highly profitable and gave us a nice profit while using it twice.

For our part, since we have gained a good profit this week we will not reinvest our weekly profits and will thus do a trading break today. Have a good weekend!

Daily Forex signals:

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

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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.

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EUR/USD: Is The Euro’s Uptrend Now Running Out Of Steam?

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Dear Traders,

If you recently bought euros against the U.S. dollar, you were exactly right and produced most probably solid black figures. We were able to turn in a good profit thanks to the solid performance of the euro. The euro rose to a fresh high of 1.1583 but the fact that a next crucial resistance zone soars around 1.16-1.1625 could limit further gains which is why the euro’s uptrend could now begin to lose momentum. However, euro bulls might tend to test that resistance before taking profit but we now anticipate a higher likelihood for a steeper correction in the EUR/USD. We expect next short-term supports at 1.1515 and 1.1480 followed by a more meaningful support area around 1.14.

The British pound came under increased selling pressure after U.K. inflation came in below expectations. The short-lived break above 1.3120 finally proved as false break-out as it happened before inflation figures were due for release. We now expect GBP/USD to trade between 1.3080 and 1.2960 but if the pound climbs again above 1.3115, we may see another leg up targeting at 1.32.

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 2017 Maimar-FX.

www.maimar.co

 

 

 

No Hope For Dollar Bulls?

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Dear Traders,

We welcome you to a new trading week. Last week ended with a spike high of 1.1212 in the EUR/USD while continuing U.S. dollar weakness remains the dominant market theme. The greenback still struggles to gain ground as political instability fears weigh on the Federal Reserve’s rate hike outlook. Investors fear that political chaos in the Trump administration may derail Trump’s plans for expansionary fiscal policy and thus deter the Fed from raising interest rates.

However, not all hope is lost for dollar bulls and if political uncertainties are abating, shifting the focus back to the administration’s fiscal program, the U.S. dollar could be poised for recovery. In the meantime we will mainly pay attention to the technical outlook in both major currency pairs.

The economic calendar this week is rather light in terms of market moving data. From the U.S., the most interesting pieces of data will be Friday’s GDP figures and Durable Goods Orders following Wednesday’s FOMC meeting minutes. Upbeat minutes may revive the dollar trade with market participants pricing in a more than 80 percent chance that the Fed will raise rates again in June.

The EUR/USD knew only one direction: upwards. From a technical perspective we now expect a next hurdle to come in around 1.13. Below 1.1070, however, the euro may drops towards a test of the 1.10-support.

The cable remained sideways whilst being accompanied by a slight upward tilt. We now expect the GBP/USD to trade between 1.3060 and 1.29.  A break above 1.3070 may send the pound towards 1.32.

Sterling traders should pay attention to any changes in the U.K. GDP figures, scheduled for release on Thursday.

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 2017 Maimar-FX.

www.maimar.co