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Much Ado About Nothing

Dear Traders,

In the end there was ‘much ado about nothing’. Market participants who had hoped for immediate sustainable moves after the Fed’s decision, were disappointed. The price action was relatively muted with only small fluctuations to both sides. In the end the U.S. dollar was the winner and accelerated against the euro and British pound.

Federal Reserve policy makers unanimously voted to raise interest rates up to 0.5 percent. This alone was the most hawkish scenario as there were no dissenters. Moreover, policy makers forecast an appropriate rate of 1.375 percent at the end of 2016, indicating four rate increases next year. This is unambiguously less dovish than the market anticipated. The FOMC is confident that inflation will rise and highlighted that the risks to the outlook for economic activity and the labor market are now “balanced”.  On the bottom line the Fed statement encouraged dollar bulls not to give up on the dollar rally in the long-run. Nonetheless, we expected more momentum on that historic day. Investors are likely to begin their holiday season now, a reason for smaller movements and a decline in volume.

Important data for today (timezone GMT):

9:00 EUR German IFO Report

9:30 UK Retail Sales

13:30 USA Philly Fed Index 

The reports could have a short-term impact on the currency pairs, but market participants are likely to digest the new Fed era and could be looking to buy dollars at lower levels. We therefore generally expect a bearish bias.

EUR/USD: Traders should pay close attention to the 1.08-level. If the euro falls below 1.0780, we see chances that it drops 100-200 pips towards the south.

GBP/USD: The focus is on the 1.49-barrier. Once this level is significantly breached, GBP could find a next support at 1.4820/15.

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

 

 

 

Decreased speculation on Fed Rate Hike

Dear Traders,

Chances of a Federal Reserve rate hike have fallen to 30 percent on the back of weaker U.S. data and China’s  slowdown, essentially complicating the Fed’s decision tomorrow. The latest U.S. reports missed expectations and fueled speculation that the central bank could delay the first rate hike.

The euro bounced off its current support area at 1.1255 and is currently heading for a reconquest of the 1.13-mark. The British Pound declined on weak U.K. inflation data, indicating that an early 2016 BoE rate increase is less likely.

Sterling traders should keep an eye on today’s U.K. labor market data, scheduled for release at 8:30 GMT.

Technically, chances are that GBP could experience a small relief rally towards 1.5440.

GBP/USD

The next resistance zone will be at 1.54. If wee see a sustained break above this level, next bullish targets could be at 1.5440 and 1.5470. With a break below 1.5330, on the other hand, we expect bearish momentum to increase.

Chart_GBP_USD_4Hours_snapshot16.9.15

Focus on Consumer Prices

Consumer Price Indices from the Eurozone and the U.S. are scheduled for release today. Traders should pay attention to these reports, as any surprises could trigger volatile moves.

9:00 EUR Eurozone CPI

12:30 USA CPI

Daily Forex signals:

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

Subscribe to our daily signal service http://www.maimar.co/signals/

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