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Focus Turns To The Fed: Dot-Plot To Show 4 Rate Hikes This Year?

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Dear Traders,

This trading week has been, so far, not only volatile but also very profitable for traders. Yesterday, we saw the U.S. dollar gaining back ground against the euro and British pound ahead of today’s highly anticipated FOMC decision. Thus, short traders were able to book a good profit.

The pound slipped below 1.40 after U.K. inflation data came in worse-than-expected but losses were limited due to hopes that tomorrow’s Bank of England statement will be hawkish.

The euro sold off after the German and Eurozone ZEW Surveys fell well below expectations.

Today, all eyes will be on the Fed decision due at 18:00 UTC followed by Jerome Powell’s news conference 30 minutes later. Market participants are curious whether the central bank will lift its projections for the pace of policy tightening this year. While a 25-basis-point rate is almost certain the focus will turn to updated economic projections (SEP – Summary of Economic Projections) and the Fed’s dot plot forecast. If the dot plot shows monetary policy makers favoring 4 rate hikes this year, the dollar will rise. Anything else could disappoint the market’s high expectations and could send the dollar tumbling.

While today’s Fed decision will be one of the most important decisions in years, it does not mean that it will be market-moving in terms of profitable trading opportunities. As usual, we will prepare for both bullish and bearish scenarios and will update traders (subscribers) about all current and pending trades on our live signal page.

We wish you profitable trades for today!

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2018 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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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

 

 

 

Wild Wednesday: Anything Is Possible, Even A Disappointment Despite Fed Tightening

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Dear Traders,

It’s Fed-decision day and the waiting finally comes to an end. After several days of range-bound conditions and low volatility, traders now prepare for volatile swings and trend-setting movements. The probability of a Federal Reserve rate hike is completely priced in while the U.S. dollar shrugged off the bullish bias. The greenback’s reluctance to commit to further tightening suggests that dollar bulls might be unimpressed by the FOMC policy announcement.

The Fed’s monetary policy decision will be announced at 18:00 UTC but the impact on the dollar could be muted as traders appear to be well prepared for a March rate hike. The spotlight however, will be on the following press conference with Fed Chair Janet Yellen and revised rate path projections. Economists expect the path for rates to include three hikes this year and in case of a steeper tightening path, the dollar will rally. However, there is a greater potential for disappointment and if Yellen sounds more balanced, preferring a wait-and-see mode, the dollar will be vulnerable to losses.

All eyes will be on the FOMC announcement but before that major risk event, traders should also pay attention to U.S. Consumer Prices, scheduled for release at 12:30 UTC.

Apart from the Fed decision, elections in the Netherlands will draw the focus back on the euro’s resilience. The Dutch vote is the biggest test of the strength and resilience of the populist surge this year. The euro could therefore tend to fluctuate sharply towards the end of the American trading session.

EUR/USD

From a technical perspective, we expect bearish momentum to accelerate if the euro falls below 1.0570. Lower targets could then be at 1.05 and 1.0380. A short-term resistance is however seen at around 1.0650. If the euro significantly breaks through that resistance-level we may see further gains towards 1.07 and 1.0790.

 

GBP/USD

Today’s short squeeze in the British pound was an impressive reminder that there is still potential for exaggerated movements. The pound surged to a high of 1.2257, which is considered a current resistance-zone in the cable. Above 1.2260 we may see further gains toward 1.23 but everything is possible today and the price action will also hinge on the appetite for USD. We generally anticipate the cable to remain within a range between 1.24 and 1.21 for the time being. On the bottom side, the pound will need to break below 1.2080 in order to invigorate fresh bearish momentum.

The U.K. employment report is due for release at 9:30 UTC and could have a minor impact on the pound.

 

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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

 

 

Traders Prepare For High Volatility Today

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Dear Traders,

The British pound has recovered some losses after it tested the lower bound of its current downtrend channel. Based on that channel we now see a current resistance at 1.3290 while any bearish moves could be limited until 1.3130. Today will be an interesting trading day for sterling traders as the Bank of England is scheduled to announce its rate decision alongside the release of the MPC meeting minutes.

The BoE is expected to hold its benchmark interest rate steady at today’s meeting but the minutes of officials’ deliberations may offer fresh clues to their thinking on Britain’s post-Brexit economy, particularly on whether another rate cut is still in the cards later this year given that growth appears to be holding up better than expected. Yesterday’s U.K. labour data showed resilience following the Brexit vote while the U.K. unemployment rate stayed steady at an 11-year low.

The BoE rate decision and MPC meeting minutes are scheduled for release at 11:00 UTC and traders should prepare for volatile swings in the GBP/USD. Before the important event, U.K. Retail Sales are due for release at 8:30 UTC.

Apart from the British pound the focus will be on the U.S. dollar today with the U.S. Retail Sales report and Philadelphia Fed Survey scheduled for release at 12:30 UTC. Stronger U.S. data will fuel speculations that the Fed could tighten monetary policy at their FOMC meeting next week.

EUR/USD

The euro finally showed some larger swings yesterday, testing its current resistance zone around 1.1270. In the 4-hour chart we see a symmetrical triangle, which may predict increased momentum after the euro broke above or, respectively, below that pattern. Above 1.1275 we see chances of a rise towards 1.1310, the resistance line of the recent downtrend channel. If the euro breaks above that resistance line we watch out for pullbacks around the 1.1330-level as it could act as a crucial resistance. On the bottom side a break below 1.1220 could send the euro lower towards 1.1170 and 1.1130.

chart_eur_usd_4hours_snapshot15-9-16

From the eurozone we have Consumer Prices scheduled for release at 9:00 UTC but no changes are expected. How the euro will trade today will mainly hinge on the performance of the greenback.

We wish you many profitable trades for today.

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/

Subscribe to our daily signal service https://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 2016 Maimar-FX.

www.maimar.co