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Euro Traders Profit From Weakening U.S. Dollar

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Dear Traders,

The U.S. dollar is taking its cue from political turmoil surrounding the Trump administration. In times of political uncertainty and unpredictability in the U.S., many investors got rid of their dollar positions which contribute to the recent dollar weakness. The euro, in return, benefited from the weakening greenback and rose towards 1.1175. There is no major resistance until 1.12, so euro bulls may tend to test that level before taking profits on euro long positions. Following the strong rally in the EUR/USD and four consecutive days of higher highs the pair finds itself in overbought territory, a fact that increases the likelihood of near-term corrections.

While we see a next hurdle at around 1.12, a break above 1.1220 could push the euro even higher towards 1.13. However, traders should now prepare for potential corrections. Current support levels are seen at 1.11, 1.1080 and 1.1020.

There are no major economic reports scheduled for release from the Eurozone but it might be worth watching ECB President Draghi‘s remarks on monetary policy when he speaks in Tel Aviv at 17:00 UTC.

The pound sterling was accompanied by a slight upward tilt, even if the 1.30-resistance level still remains unbroken. Once that level is breached to the upside, we could see sterling rising towards 1.3040 and possibly even 1.3120.

The U.K. Retail Sales report is due for release at 8:30 UTC and could have an impact on the price action in the cable. If the pound drops back below 1.2930 it could find a next halt at around 1.2870.

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Will U.K. CPI Data Prompt Sterling Bulls For A Run For 1.30?

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Dear Traders,

Euro bulls have regained control and pushed the EUR/USD up to a test of 1.10 this morning. Traders are now on the look-out for a sustained upside-break of that psychological level. If the euro breaks above 1.1023, the opening price following the first round of French elections, we see chances of a climb towards 1.1070. On the bottom side, we expect a current support to be around 1.09. The most important piece of Eurozone data this morning will be the Gross Domestic Product for the first quarter, scheduled for release at 9:00 UTC. At the same time, the German ZEW Survey is due for release. Any upside surprises could translate into further euro strength.

The British pound found some halt near 1.2880 after an attempt to break the 1.2940-level has failed. All eyes will be on the Consumer Price report, scheduled for release at 8:30 UTC and if inflation data is upbeat, the pound could trade higher targeting 1.2970 and 1.3020. Current support levels are however seen at 1.2860 and 1.28.

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Euro Bulls Profit From U.S. Dollar Weakness

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Dear Traders,

The U.S. dollar traded lower against the euro and British pound after U.S. retail sales and CPI data fell short of estimates. Following Friday’s softer reports, the odds for a Federal Reserve rate increase next month have fallen to about 70 percent, even though data was still good enough to bolster the case for tightening in June.

EUR/USD

The euro rose towards its 1.0950-resistance after re-testing the current support zone ranging from 1.0855 to 1.0820. We will now pay close attention to a renewed break above 1.0950 which could result in a climb towards 1.1050.

Despite the low-volatile market environment there might be a catalyst for some swings throughout this week. The German ZEW Survey is due for release on Tuesday, followed by the Eurozone Consumer Price Report which is due on Wednesday and a speech of ECB President Draghi on Thursday.

GBP/USD

The pound sterling remained range-bound between 1.2990 and 1.2845 and traders still wait for, at least, a test of 1.30. It could be an interesting week for sterling traders with U.K. Consumer Prices (Tuesday), Employment data (Wednesday) and Retail Sales (Thursday) scheduled for release. Most of these reports are expected to surprise to the upside, so we may see a run for 1.30 and possibly even a test of 1.3050.

A bearish break below 1.2750 however, could increase bearish momentum towards lower targets around 1.26.

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Will NFP Help Or Hurt U.S. Dollar?

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Dear Traders,

The biggest story on Thursday was the rise of the euro which has surged to a high of 1.0987. The euro is currently supported by expectations of a Macron win in the final round of French elections this Sunday. While we bear in mind that if Le Pen surprises on Sunday, the market’s reaction would be far greater, the most likely scenario is however a victory of the pro-euro candidate Emmanuel Macron. Markets are therefore unlikely to budge much if Macron wins.

Apart from the French election, great attention will be paid to the Non-Farm Payrolls report which appears to be the market-moving event for this week. The U.S. Jobs report is forecast to show a job growth of 190K jobs last month but the focus will also be on Average Hourly earnings. A large miss in this key figure or a disappointment in payrolls growth may raise doubts about a Fed June rate hike. In other words, a disappointment would have a greater impact on the market than a strong report. In case of a weaker jobs report the U.S. dollar could come under strong selling pressure.

The NFP report is due at 12:30 UTC today.

We wish you good trades and a nice weekend!

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All Eyes On Draghi: Will He Talk Down The Euro?

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Dear Traders,

The British pound finally broke above 1.2865 this morning and a next hurdle could now be at 1.29. If the pound rises above 1.2910 we may see a run for 1.30. Let’s us wait and see.

The much anticipated U.S. tax plan disappointed investors as it left too many unanswered questions and did not reveal anything new. The U.S. dollar weakened against the euro and pound as a result. The “phenomenal” tax plan came in as a one-page list of bullet points and was largely devoid of detail.

Euro traders will shift their focus to the European Central Bank meeting while no changes are expected from the central bank. ECB President Mario Draghi will most likely maintain a dovish monetary policy stance since a strong euro is the biggest problem for policy makers and makes it more difficult for the ECB to achieve its inflation target. In a nutshell, we doubt that Draghi is debating an exit from its extraordinary stimulus. With no fresh insights, the ECB meeting could thus be a non-event for traders but let us be surprised.

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Can The Euro Hold Onto Its High Price Level?

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Dear Traders,

The euro broke above Monday’s spike high at 1.0923 but gains were capped at 1.0950, at least for the time being. The question now is whether there is still room for further gains. Looking at the 4-hour and daily chart we see that the EUR/USD is in overbought territory, a situation that increases the likelihood of upcoming corrections. We see a next hurdle at around 1.0970 followed by a stronger resistance at 1.10. As long as the euro remains firmly below 1.10 we prepare for corrective movements towards 1.09, 1.0840 and possibly even 1.0750.

The British pound rose towards the upper bound of its recent sideways trading range but still refrained from an upside break above 1.2850. As noted in previous analysis, sterling bulls better wait for a significant break above 1.2860 in order to buy pounds towards 1.30. A break below 1.2730 however, could send the pound tumbling towards 1.2650.

There are no major economic reports scheduled for release today, so the price action could hinge on U.S. President Trump’s tax-reform speech. Trump is expected to unveil a tax plan that includes a cut of the corporate rate to 15 percent from 35 percent. If he delivers we could see some renewed strength in the U.S. dollar.

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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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Can Euro And Pound Hold Onto Their High Levels?

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Dear Traders,

The U.S. dollar fell to its lowest level since November as investors assessed the U.S. administration’s ability to push through promised tax cuts and infrastructure spending. That, in turn, raises doubts as to whether the Federal Reserve can raise interest rates as aggressively as had been priced in. Fed chair Janet Yellen will speak today at 16:50 UTC and dollar bulls fear that fiscal uncertainty may discourage Fed officials from taking an aggressive stance towards higher rates. In case Yellen’s tone is more cautious, the dollar could tend to fall.

Apart from Yellen’s speech, U.S. Advance Goods Trade Balance (12:30 UTC) and Consumer Confidence (14:00 UTC) are scheduled for release.

The euro broke above 1.0870 and extended its gains to a high of 1.0906. In case of a renewed break above 1.0875 we expect further bullish momentum, sending the euro higher towards 1.0920/50. A current support is however seen at around 1.0820.

The pound sterling marked a fresh high at 1.2615 while sterling traders have shrugged off tomorrow’s Brexit trigger. On Wednesday, U.K. Prime Minister Theresa May will formally trigger the start of two years Brexit negotiations and while this event poses a risk to the currency the British pound remained stable around 1.2550. Nonetheless, we expect the upward movement to be limited to 1.2650 in short-term time frames. The pound may tend to test that resistance area before we will see any major pullback.

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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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U.S. Dollar Weakens On Unchanged Fed Forecasts

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Dear Traders,

The market’s response to the FOMC announcement was as expected. The Federal Open Market Committee raised its benchmark interest rate to a range of 0.75-1.00 percent and continued to project two more hikes in 2017. In a nutshell, since the Fed’s rate hike path remained unchanged from December 2016 there was no new hawkish guidance which would have helped to boost the U.S. dollar. Thus, yesterday’s rate hike is interpreted as a ‘dovish hike’.

The U.S. dollar slipped on the unsurprising decision as well as unchanged forecasts and both euro and pound climbed toward higher targets in return. The euro touched a high of 1.0746 while euro bulls were able to pocket a good profit. The euro received an additional boost after a large majority of Dutch voters have rejected anti-European populists. Conservative Dutch Prime Minister Mark Rutte has beaten his far-right rival Geert Wilders in the Dutch elections.

On balance, that’s good news for the euro but what can we expect from a technical perspective? There could still be some room for further upward momentum toward 1.08. If the euro climbs above 1.0750 it may head for a test of 1.08 but gains could be limited until that level. For the euro to continue to rally, it may require a break above 1.0830. If the 1.08-level remains unbroken we expect some corrections towards 1.0650 and 1.0550.

Eurozone Consumer Prices are scheduled for release at 10:00 UTC but those figures are not expected to surprise the market.

The British pound slightly strengthened on a weakening greenback but gains have been limited until the 1.23-resistance area. In case the pound will be able to overcome that hurdle we anticipate a run for 1.24.  On the downside, we will wait for a significant break below 1.22 in order to favor a bearish bias. The 1.2230/10-area could act as a current support-zone for the pound.

Today’s major risk event will be the Bank of England’s monetary policy announcement at 12:00 UTC. While no changes are expected, the BoE’s statement could trigger large market moves in the GBP/USD. Let us be surprised.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

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Dollar Weakness Continues

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Dear Traders,

The greenback continued to weaken against the euro and British pound. While the euro was Thursday’s best performer, rising towards 1.0680 and providing euro bulls a good profit, there was less consistency in the performance of the pound sterling. The pound traded sideways after peaking at 1.2524 and buyers had to be content with a modest profit. U.K. Retail Sales are due for release at 9:30 UTC but this report is not expected to have a significant impact on the pound.

Apart from the second-tier U.K. Retail Sales report, there are no major economic reports scheduled for release today and thus, the price action might be oriented towards resistance- and support levels. Let’s have a look at the current important price levels:

  Resistances Supports
EUR/USD 1.0705

1.0750

1.0775

 1.0630

1.06

1.0550

 

  Resistances Supports
GBP/USD 1.2550

1.26

1.2675

 1.2440

1.2410

1.2330

We wish you a relaxing weekend.

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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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Euro Paradoxically Rallied Despite Political Risks

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Dear Traders,

It was a paradox: The euro shrugged off political risks from Italy and rallied towards 1.08 amidst political uncertainties in Europe. The short squeeze in the EUR/USD can be explained by profit taking after the euro rejected to extend its losses beyond 1.05. However, given the anti-establishment mood sweeping around the world we doubt that the euro can hold onto its recent gains. Thus, dollar bulls may jump in again and take this opportunity to sell EUR/USD at higher levels. Nevertheless, we will also discuss a potential bullish scenario.

If the euro rises above 1.08, traders will be asking “How high the euro might go?”. So let’s try to figure it out.

EUR/USD

Given the impressive bull candle in the daily chart, we might see further upward movement before the euro reverses. In short-term time frames a next resistance could be at 1.0830/50, followed by a stronger resistance zone at 1.0950. If the euro takes the next hurdle at 1.0830, chances increase that it heads for a test of 1.0960. Above 1.0970 however, the euro may rises towards 1.1030 and perhaps even towards 1.11. Current supports are however seen at 1.0650 and 1.06.

chart_eur_usd_daily_snapshot6-12-16

GBP/USD

The cable is still on the rise but we expect gains to be limited until 1.2760 and 1.28. A significant break above 1.28 may drive the pair towards 1.2860 but then we may see some pullbacks. Crucial supports are seen at 1.26 and 1.25, which is why sterling bears should rather wait for a break below 1.2480.

chart_gbp_usd_daily_snapshot6-12-16

 

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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