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Will U.K. CPI Data Push The Pound Above 1.27?

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Dear Traders,

The U.S. dollar weakened against most major currencies on Monday. Ahead of Wednesday’s Federal Reserve statement investors are concerned that US-policymakers were to flag the risk of a strengthening dollar on the U.S. economy, suggesting that the dollar rally has gone too far. Most of the dollar gains have come about as a result of expectations that Trump will enact policies that increase spending as well as spur growth and inflation. It remains to be seen how the political program will look like during Trump’s term as president while the details of an eventual fiscal-spending program are still written in the stars.

The euro tested the 1.0650-level and our yesterday’s long-entry has proved successful. We will now wait for the euro to overcome the 1.0665-barrier in order to focus at higher targets at 1.0710 and 08. On the bottom side, the 1.0470-support remains intact. Euro traders should keep an eye on the ZEW Survey, due for release at 10:00 UTC. The euro might tend to strengthen ahead of that report.

Particular attention will be paid to the British pound and the U.K. Consumer Price report scheduled for release at 9:30 UTC. CPI data is expected to show an uptick in November which is why the pound may appreciate against the greenback ahead of that report. We will focus on an upside break above 1.27, which could drive the pound towards higher targets at 1.2770 and perhaps even 1.2870. A current support is however seen at 1.2530.

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U.S. Dollar Weakened Ahead Of CPI Data

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Dear Traders,

The U.S. dollar weakened against the euro and British pound ahead of today’s consumer price reports. While Monday’s trading in the EUR/USD was quiet and none of our entries was triggered, sterling traders had to struggle with false breakouts within a tight trading range. Thus we had to record some losses before our last buy attempt proved to be successful. The pound strengthened before the U.K. releases inflation figures today at 8:30 UTC and sterling traders should pay close attention to the CPI report as it could have a major impact on the price action in the GBP/USD.

Technically, the pound broke above a descending trend line, pointing to further upside momentum in the short-term. If the pair is unable to break above 1.2275, the recent upward movement could be on shaky ground.

Bullish scenario: Above 1.2275 we expect further gains towards the next resistance at 1.2320/50. Above 1.2375 the pound may even head towards 1.2430.

Bearish scenario: Below 1.2130 we expect further pound weakness.

chart_gbp_usd_4hours_snapshot18-10-16

Apart from the U.K. CPI report we have U.S. Consumer Prices scheduled for release at 12:30 UTC. Economists predict the report to show inflation is accelerating and if they are right the dollar will strengthen in the wake of Federal Reserve rate hike speculations before year-end.

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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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U.S. Dollar Slumped as Fed September Rate Hike Seems Unlikely

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Dear Traders,

The euro and British pound rebounded strongly against the U.S. dollar after bearish momentum failed to drive both currency pairs significantly lower. Ultimately, short-traders’ efforts did not pay off and we suffered losses with yesterday’s short-entries.

The Federal Reserve is more upbeat about the economic outlook, saying that near-term risks to the U.S. economy have diminished and that job gains were strong, the FOMC statement showed. However, there was no indication of the specific timing of the next potential rate hike and with Esther George being the lone hawk, it has not been enough for the greenback to maintain it strength. Consequently, traders gave up on dollar long positions as they see only little chance of a rate hike in September. The market is now pricing in a 50-50 chance of a rate increase in December.

The euro rose towards 1.1080 on the back of broad based dollar weakness. We now see a next resistance around the 1.11-level which could limit the gains in the EUR/USD. If the euro breaks above 1.1130 it could head for a renewed test of 1.1160. However, if prices fall back below 1.10 we will favor a bearish stance.

The British pound marked a strong support at 1.3060 from where it reversed. Given the recent sideways trend we will now focus on an upper bound at 1.33, whereas the 1.3060-level is seen as the lower bound of the cable’s trading range. Above 1.3350 the sentiment may shift in favor of the bulls but we expect short-term gains to be limited until 1.3410/50.

There are no major economic reports scheduled for release today. The German Unemployment report (due at 7:55 UTC) may have a short-term impact on the euro but the price action will depend on risk appetite.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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Upward Movement To Be On Shaky Foundations?

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Dear Traders,

While we actually got the breakouts what we have been looking for, the market’s fluctuations proved to be limited to either side Monday. Sterling traders were able to pocket some profits with both long and short-entries whereas euro traders still struggle with the euro’s poor performance. The EUR/USD fluctuated between 1.1075 and 1.1015 and neither our sell attempt nor a later buy order provided a sustained profit. Consequently, euro traders will need some more patience and wait until market conditions improve.

The pound sterling climbed towards 1.31 as the leadership certainty in the U.K. provided some relief for the currency. Theresa May will be appointed as Britain’s next prime minister and even though May will have to resist pressure to rush into the Brexit negotiations, Britain’s second female prime minister is not seen in a hurry to trigger Article 50, the formal start of an EU exit.

In the meantime, it is going to be a big week for Bank of England Governor Mark Carney, who faces the U.K. parliament’s Treasury Select Committee today at 10:00 UTC, ahead of Thursday’s interest rate decision. Economists expect the BoE to cut rates by 25 basis points, which would be the first rate cut since 2009. With this in mind sterling is expected to remain under pressure ahead of Thursday’s monetary policy decision.

Furthermore, two Fed officials are scheduled to speak today around 14:00 UTC, which could influence the dollar’s performance as long as they maintain a hawkish stance.

The euro rose towards 1.11 but the technical picture has not changed significantly. Long-term swing 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 2016 Maimar-FX.

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Brexit Is The Big Elephant In The Room Urging The Fed To Adopt Slower Rate Hike Path

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Dear Traders,

The market reaction to the FOMC statement was more muted than expected. While the cable maintained a daily price level around the 1.42-mark, the euro surged to a high of 1.1298 after the Federal Reserve held interest rates steady. While the decision to leave rates steady in June was widely expected, Fed chair Yellen declined to provide any guidance on the timing of future rate increases during her press conference. However, the Fed has taken a more cautious stance with regard to next week’s referendum in the U.K., a decision that “could have consequences for economic and financial conditions in global financial markets (…) and in turn for the U.S. economic outlook”, Yellen said. At present, the Brexit vote is the greatest uncertainty in the market.

In the light of a slower approach to interest-rate increases, the U.S. dollar weakened but losses were limited as the dollar is profiting from its function as a safe haven amidst all uncertainties. Traders should bear in mind that as long as the market is biased by the upcoming Brexit vote we might not see any sustained movements in the currencies. Large investors are likely to wait until after the big event in order to take new positions.

Today, the focus shifts to the U.S. Consumer Price report scheduled for release at 12:30 UTC. In case of any unexpected surprises the dollar will respond accordingly. Apart from that most important piece of economic data, the Bank of England is scheduled to announce its monetary policy decision at 11:00 UTC but no changes are expected, making it a non-event for traders. Before the BoE interest rate decision, U.K. Retail Sales are due for release at 8:30 UTC which could have a minor impact on the pound.

From the Eurozone we have Consumer Prices scheduled for release at 9:00 UTC but if the report is in line with the expectations, it will not have a significant impact on the euro.

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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 Struggles With 1.14 While Sterling Went Into A Tailspin

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Dear Traders,

The European Central Bank began buying corporate bonds on Wednesday and the euro climbed above the 1.14-mark. However, the slight appreciation of the euro can rather be attributed to the shift in expectations for Federal Reserve tightening. The U.S. dollar weakened as Investors see only a 58 percent chance that the Fed will raise rates by year-end. The greenback’s recent weakness contributed markedly to the increase in the euro but in general the dollar remains a buy on pullbacks as the Fed remains on track to raise interest rates in 2016.

The movements were, however, limited in the currency market. The euro rose merley 10 pips above the 1.14-barrier whereas it marked a current support at around 1.1350. ECB President Mario Draghi is scheduled to speak in Brussels at 7:00 UTC, which could impact on the euro.

From the U.S. we have Continuing and Initial Jobless Claims due for release at 12:30 UTC, but these reports are not expected to have a significant impact on the USD.

The British pound rebounded from a high at 1.46 as Brexit risks continue to put pressure on the currency. If sterling breaks again significantly below 1.4495, we see a greater chance of a renewed bearish move towards 1.4440 and 1.4385. However, above 1.4540 gains could be limited until 1.4580.

The only second-tier economic data from U.K. will be Trade Balance figures due for release at 8:30 UTC.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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Price Action Continues To Be Muted But Watch Out For A GBP/USD-Breakout

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Dear Traders,

The U.S. dollar failed to trade sustainably higher against the euro and British pound Thursday. While dollar bulls may have hoped for stronger U.S. data to reaffirm the dollar’s strength, expectations have been disappointed – at least yesterday. The Philadelphia Fed index came in softer than expected and thus failed to encourage dollar bulls to push the currency higher. With the Fed’s willingness to raise rates as early as June, the main focus will be on the May Non-Farm Payrolls report due to be released on June 3. The currency market is generally looking to further dollar strength and if incoming U.S. data is surprising on the upside it could be a catalyst for some downside breakouts in both EUR/USD and GBP/USD.

U.S. Existing Home Sales are scheduled for release at 14:00 UTC but this report is unlikely to trigger significant movements.

The British pound initially rose as high as 1.4663 as the price action was boosted by stronger-than-expected U.K. retail sales. However, sterling was unable to hold onto its gains and ended the day unchanged against the greenback. We now see a higher likelihood of an upcoming breakout of the cable’s recent narrow trading range. We will therefore focus on prices above 1.4620 for any bullish and vice versa on prices below 1.4590 for any bearish engagements. Given the recent uptrend channel higher targets could be at 1.4695 whereas a support could be at 1.4490.

Chart_GBP_USD_4Hours_snapshot20.5.16

The price action in the EUR/USD was muted and the currency pair fluctuated within a narrow trading range of 50 pips. Traders should wait for an upside break above 1.1230 or vice versa, a downside break below 1.1180. Above 1.1230, higher targets could be at 1.1260 and 1.1290, whereas below 1.1180, the euro could fall towards 1.1130.

We wish good trades and a wonderful weekend.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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U.S. Jobs Report To Determine Direction

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Dear Traders,

The euro traded lower ahead of today’s highly anticipated U.S. jobs report, which may shed light on U.S. growth and whether the economy is strong enough for higher interest rates. The payrolls report is forecast to show a 200k jobs-increase for April but it would require an upside surprise in the headline figures of the report. We can speak of a strong jobs report if the unemployment rate shows a decline, average hourly earnings are on the rise and payrolls growth exceeds at least 220k. If there will be no upside surprise, supporting the case for tighter monetary policy in the near-term, the dollar could give up some of its recent gains.

The Non-Farm Payrolls report is scheduled for release at 12:30 UTC.

EUR/USD

It all depends on today’s key employment data, but from a technical perspective traders should focus on the overall picture. In the medium-term the euro is still trading within an upward-channel. Given the recent downward move we will now focus on the lower bound of that channel which is currently around 1.1360/40. If the euro breaks below 1.1335 we see chances of further losses towards 1.12 and 1.1150. If, on the other hand, the euro is able to climb again above 1.15 and farther 1.1530, it could even head for a test of 1.1630. However, if NFP data fails to impress, the EUR/USD could remain confined to a trading range between 1.15 and 1.1350.

Chart_EUR_USD_Daily_snapshot6.5.16

The British pound, however, refrained from trading lower than 1.4443. After a break below 1.4440, sterling could be vulnerable to further losses and we will shift our focus to lower targets at 1.4330. A current resistance is seen at 1.4520.

We wish all traders a profitable trading day but bear in mind that the trading on payrolls day is highly risky and is therefore not for the faint-hearted. Personally, we will not invest our weekly profits and take it easy today.

Have a beautiful weekend.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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U.S. Dollar Whipsawed On FOMC

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Dear Traders,

Yesterday was none of our favorite trading days with the U.S. dollar showing a whipsaw performance after the FOMC statement failed to provide clear signals on potential tightening in June. One man’s joy is another man’s sorrow: The market’s response to the central bank’s statement has probably been the most positive scenario for the Fed, as policy makers want to avoid overreactions in the price development. For traders, however, it was rather a struggle against choppy swings and fake-outs. We therefore suffered losses instead of benefiting from the volatile fluctuations.

The statement came in somewhat more hawkish, showing that policy makers are less concerned about global risks but it did not provide any hints for a rate hike in June. The greenback whipsawed in response on the unconvincing statement. With still more than six weeks to go before the next Fed meeting in June the focus in the near-term will be on inflation and labor market data from the U.S.

Today, we have the German Unemployment report scheduled for release at 7:55 UTC, followed by the German Consumer Price at 12:00 UTC. If data disappoint the euro could weaken.

Furthermore, the U.S. first-quarter GDP report is due for release at 12:30 UTC and in case of any surprises, the USD may react strongly.

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Despite Low Volatility Bulls Still Gain The Upper Hand

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Dear Traders,

Despite worse-than-expected German business-confidence data the euro has held up well against the U.S. dollar Monday. Although prices fluctuated within a confined band of only 40 pips, the euro showed resilience against the greenback ahead of the Federal Reserve meeting. With the euro remaining firmly above 1.1240, we expect another test of the 1.13-barrier, which may result in an upswing towards 1.1335 and 1.1355. However, while we do not expect a shift in sentiment a test of these lower resistances might be likely before the Fed statement.

The British pound tested the 1.45-mark but was unable to sustainably maintain the high price level. Whether we will see an extended upside move remains to be seen and should also hinge on the performance of the U.S. dollar. Above 1.4520 the pound could extend its gains towards 1.4560 and 1.4590. However, below 1.4480 it could fall back towards 1.4450 and 1.4410.

Traders should keep an eye on important economic data from the U.S. such as Durable Goods Orders, scheduled for release at 12:30 UTC and Consumer Confidence due at 14:00 UTC.

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