Posts

U.S. Dollar Suffers Losses After Yellen Sends Dovish Message

Dear Traders,

While dollar bulls may have hoped for salvation before Yellen’s speech in New York, the chair indoctrinated the market with a dovish message and stressed the need for a cautious approach. Yellen stated detailed conditions investors need to watch for future rate hikes. These conditions contain the stabilization of commodity prices and foreign economies. Furthermore she stressed the importance of a strong dollar, which would depress inflation and exports if it appreciates further.

The most dovish line was when Yellen said that the committee “would still have considerable scope” to ease policy if needed, smashing down the latest hawkish comments from Fed officials pointing to the possibility of a rate hike in April. The Fed chair said it was appropriate to “proceed cautiously” and reiterated that the Fed is not following a pre-set course of rate hikes, but will act when conditions are right.

On the bottom line we can say that there is not much hope for the U.S. dollar to show signs of recovery in the near-term. Yellen’s dovish message diminished rate hike expectations for 2016, changing the odds in favor of a December rate hike or even later.

As expected in yesterday’s analysis, the euro headed for a test of 1.13 after breaking above 1.1260. We expect the euro to continue its bullish bias and focus on a break above 1.13 and further 1.1340. If the euro is able to climb above the February high of 1.1376 we see a next resistance at 1.1430/50 before facing the 1.15-barrier. Current supports are seen at 1.1250 and 1.1220.

The British pound responded with the most volatile upswing, jumping more than 130 pips from our long-entry. As stated in yesterday’s analysis the pound could be vulnerable to losses after peaking at 1.44/1.4430. However, a break above 1.4450 could send sterling towards 1.45. On the bottom side we expect the 1.43-level to lend a current support to the GBP/USD.

Traders should pay close attention to important economic data, such as the German CPI, scheduled for release at 12:00 GMT followed by the ADP report 15 minutes later.

Daily Forex signals:

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

 

Market May Underestimate The Fed’s Hawkish Outlook

Dear Traders,

Despite the relatively low volatility in the currency market the U.S. dollar appreciated against all other major currencies. Trading conditions in the EUR/USD were overall quiet and short-traders had to be satisfied with smaller profits. Given the low volatility environment before the Easter break we do not expect the euro to show larger movements today even though U.S. Durable Goods Orders are scheduled for release at 12:30 GMT and forecasts point to a decline in the headline figure, which may trigger short-term pullbacks in the greenback.

Unlike the euro the GBP/USD showed more volatile swings which have unfortunately resulted in two false breakouts before sterling was able to break below 1.4150. According to the saying “all good things come in threes” a third sell order would have finally hit all profit targets but as we always abide by our trading rules we missed out on that profitable downward move.

Having digested the recent terror attacks in Brussels the interest of investors is once again increasingly directed towards the Federal Reserve’s tightening cycle. Comments from Fed speakers seem to be suggesting a more hawkish outlook for interest rates than the market is currently pricing in. Fed Bank of St. Louis President James Bullard said in an interview yesterday that policy makers should consider an interest rate increase at their next meeting in April. He sees the case for a move in April if another strong jobs report confirms that the labor market is improving, underlining the unchanged economic outlook and prospects for higher inflation. Bullard stressed that the committee might “raise rates more rapidly later on” if unemployment exceeds targets. Fed officials will now “look at April and see what the data looks like” when the next meet on April 26-27.

The focus will therefore shift to March Nonfarm payrolls data due for release next Friday April 1. As a rate hike next month has not been priced in, the dollar could rally strongly if the jobs report is strong.

U.K. Retail Sales (9:30 GMT) and U.S. Durable Goods Orders (12:30 GMT) are due for release today and could trigger the last volatile swings this week.

GBP/USD: Technically we see current resistances at 1.4155 and 1.4190, whereas lower support levels could be at 1.4035 and 1.40.

EUR/USD: Amidst low volatility conditions we see current resistances at 1.1205 and 1.1235. However, lower supports are seen at 1.1135 and 1.1110.

Please note that we will not provide any signal alerts on Good Friday and Easter Monday. We will be back on Tuesday, March 29.

We wish you a very Happy Easter!

Daily Forex signals:

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

 

 

 

Possible Pullbacks In The Greenback – Focus On U.S. Retail Sales

Dear Traders,

The U.S. dollar was supported by speculation about the trajectory of interest rates before the Fed announcement tomorrow. While a rate hike this month is very unlikely ,chances for an increase later this year have increased. The probability of a rate hike in June is now about 50 percent while analysts see a 63 percent chance of an increase by December.

The euro weakened against the greenback but was able to remain above the 1.1070-50 support area. We will focus on a break of 1.1070/50 in order to sell the pair EUR/USD towards lower levels at 1.10 and 1.0910. On the upside gains could be limited until 1.1160 and 1.1220. With only one day to go before the FOMC announcement the dollar could be vulnerable to pullbacks as U.S. Retail Sales scheduled for release at 12:30 GMT are forecast to show a marked decline in February.  

The pound sterling returned to the slippery slope, falling back below 1.43. As stated in yesterday’s analysis we see a current support at 1.4250/40. Once that support level is significantly breached to the downside we will shift our focus towards lower targets at 1.4170 and 1.4120. Current resistances are seen at 1.4310 and 1.4360.

Daily Forex signals:

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

 

 

 

Euro And Cable Are Stuck In Tight Ranges

Dear Traders,

As expected, the FOMC minutes failed to trigger any major market movements and both currency pairs traded boringly within tight trading ranges. Consequently, there was nothing to be gained for traders.

Many Federal Reserve officials saw increased downside risks to the outlook for the U.S. economy if the recent global market turmoil, including the slowdown in China was sustained, the minutes showed. While rate hike expectations for 2016 have been gradually priced out, there is still a small chance for the Fed to raise interest rates in the middle of the year. Policy makers emphasized that the timing and pace of adjustments will depend on future economic and financial developments and so, if the U.S. economy continues to improve the Fed could follow its path of further tightening.

We will wait and see and focus on technical conditions. The EUR/USD formatted a current trading range between 1.12 and 1.11 and traders should rather wait for any sustained breakout above or below that range. If the euro breaks above 1.1215, there is a next hurdle at 1.1240/50, which needs to be broken before we can shift our focus to 1.13 again. On the downside, we expect the 1.1085-70 area to be crucial for further bearish momentum. With a break of 1.1070, we could see the euro falling towards 1.1050 and 1.0990.

The GBP/USD remained well above 1.4240 but was not able to exceed the 1.4340-level. Once the 1.4340-level will be breached to the upside, sterling could rally towards 1.4380 and 1.44. Above 1.4410 the next crucial level could be at 1.4450. However, below 1.4270 we will turn our focus towards the 1.42-mark.

Today we will keep an eye on the following important economic reports which may have an impact on the currencies:

12:30 EUR ECB Meeting Minutes

13:30 USA Philly Fed Index

16:00 USA Crude Oil Inventories

(Time zone GMT)

Daily Forex signals:

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

 

 

 

FOMC Minutes Could Fail To Be A Big Market Mover

Dear Traders,

Break-out traders who had hoped for larger fluctuations in the EUR/USD have been disappointed by yesterday’s inconsistent performance. In addition, we had a bit bad luck with our short-entry and had to give up some of our previous gains. Sterling traders, however, were able to take advantage of high volatility in the GBP/USD and gain profits in both directions.

All eyes will be on the FOMC minutes today, but it is doubtful whether the Fed meeting minutes will be a big market mover. Given the last monetary policy statement and Yellen’s latest remarks on the economy, the Fed’s stance is anticipated to be neutral to slightly dovish, which would be dollar-negative in the near-term. Looking back on the trading day of the last Federal Reserve meeting, we saw the EUR/USD trending upwards, while the GBP/USD was trending downwards. While we do not expect today’s FOMC minutes to have a major impact on the currencies, we expect the euro trade higher against the greenback ahead of the minutes, whereas the cable could be vulnerable to further losses.

For the British pound, the most important piece of data will be today’s U.K. labor market report scheduled for release at 9:30 GMT. While the unemployment rate is forecast to show a decline, the focus will be on wage growth, which is expected to expand at a slower pace. If Weekly Earnings fall short of expectations, we could see sterling tumbling towards 1.42 and 1.4150.

GBP/USD

The cable broke below its recent trading range and currently tests the lower trend line of its secondary uptrend channel. If the pair breaks below 1.4265 and further 1.4240 next lower targets are seen at 1.4208, 1.4150 and 1.4130. On the upside, the currency pair would need to break significantly above 1.4370 and further 1.4410 in order to rally towards 1.4475 and 1.4550.

Chart_GBP_USD_4Hours_snapshot17.2.16

 

Important economic data for today:

9:30 UK Labor Market Report

13:30 USA Housing Data & PPI

19:00 USA Fed Minutes

(Time zone GMT)

Daily Forex signals:

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

 

Will Yellen Help Breathing New Life Into The U.S. Dollar?

Dear Traders,

The U.S. dollar has become more fragile following the global market turmoil. Until recently, the greenback was considered a safe haven currency but the roles have reversed. Since the Federal Reserve set up a policy tightening path amidst global economy slowing and other central banks turning to negative rates, the U.S. dollar lost a large part of its demand. Investors are sceptical whether the Fed can continue raising interest rates this year, making the long-dollar trade unattractive.

Fed chair Janet Yellen is scheduled to appear before the House Financial Services Committee today at 15:00 GMT and market participants will be scrutinizing her remarks for hints of whether the Fed may downplay chances of a March rate hike. Even though the U.S. job market has been surprisingly strong, many analysts believe the central bank could shift to a dovish tone, preparing the market for no changes next month. However if Yellen keeps the door open to possible tightening in March, we could see the dollar strengthening. We will wait and see and prepare for high volatility at the time of the testimony.

Before the main event risk, sterling traders should keep an eye on U.K. Industrial and Manufacturing Production, scheduled for release at 9:30 GMT. The cable traded between 1.4515 and 1.4378 providing no clear direction. While today’s price action will be determined by investor’s appetite for U.S. dollars, we will focus on the following important price levels:

  Resistances Supports
GBP/USD 1.4520

1.4545

1.46

1.4640

1.4375

1.4350

1.4245

1.4150

 

  Resistances Supports
EUR/USD 1.1330

1.1380

1.1450

1.15

 

1.1155

1.1105

1.1070

1.0980

 

Daily Forex signals:

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

 

 

Dollar Bulls Need More Signals To Reinvigorate The Long-Dollar Trade

Dear Traders,

After investors have been scared out of their long-dollar positions ahead of Friday’s U.S. job report, they must now reconsider the timing of interest-rate hikes this year. The latest non-farm payrolls report raised doubts about recent speculations the Federal Reserve could be inclined to forgo future rate increases in 2016. While payrolls increased by only 151K last month, the jobless rate fell to 4.9 percent, which was the lowest level since February 2008. In addition, wage growth showed a higher reading, which was reason enough for dollar bulls to send the greenback higher. Nonetheless, it was not easy for traders to handle the sharp fluctuations when job numbers were due for release. Consequently, those who have made a trading break on Friday have made the best choice.

What is important for the this week?

Apart from Fed-Chair Janet Yellen’s testimony on Wednesday and Eurozone GDP-reports and U.S. Retail Sales on Friday the economic calendar is light. Yellen appears before the House Financial Services Committee to testify on economy and monetary policy and market participants will look for an unambiguous confirmation of the future outlook, whether the Fed will grow less hawkish or maintain an optimistic stance, pointing to further tightening in 2016. The dollar’s performance could therefore hinge on Wednesday’s testimony.

The GBP/USD seesawed Friday but ended the week below 1.45. Our focus will be on the 1.4350-level, which may act as a support for the currency pair. A significant break below that level could send sterling back towards 1.4240 and 1.4150. However, remaining above 1.44, we might see the pound rallying towards 1.46 and 1.47, albeit we assume that the 1.47-mark could be a strong resistance. There are no major economic U.K. data reports until Wednesday when Industrial and Manufacturing Production is scheduled for release.

The EUR/USD is currently trending downwards. We expect the 1.1070-level to lend a short-term support for the pair. If this support proves to be correct, we may see a small rebound towards 1.1150 and 1.1180. This scenario would then format a head-shoulders pattern, which could be in play as soon as the euro breaks below 1.1070, reinforcing strong bearish momentum.

Chart_EUR_USD_4Hours_snapshot8.2.16

We wish you a good start to the week and many profitable trades.

Daily Forex signals:

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

 

 

 

Will U.S. Payrolls Trigger A Second Round Of Dollar Weakness?

Dear Traders,

Choppy fluctuations in the GBP/USD Thursday left much to be desired for traders. Any upward movements were oriented towards the rising trend-line, limiting further gains in the currency pair. The short-lived downward move during the release of the Bank of England’s inflation report also failed to show sustained momentum. In the light of the latest inflation forecast the outlook has become cloudy, at least until 2018. The Bank of England cut its inflation forecast once again, while the Monetary Policy Committee voted 9-0 to keep rates on hold. The MPC reflected the possibility of greater persistence of low inflation in the near-term, while the forecast shows inflation will rise in two years.

In a nutshell, the bearish bias is likely to continue into the second half of 2016 before a trend reversal.

The euro appeared to be unaffected by European Central Bank President Mario Draghi, who said on Thursday that policy makers must not surrender to low inflation and reiterated the ECB’s dovish monetary policy stance. On the contrary, the EUR/USD preferred the upward trend on speculations the Fed will delay tightening policy.

Going into today’s’ highly anticipated Non-Farm Payrolls report, the current weakness of the U.S. dollar is dominating the markets and we are eager to see whether payrolls data will trigger another round of dollar weakness.

The odds are in favor of further dollar weakness as the January U.S. jobs report is forecast to show a smaller expansion, rising only by 190K last month. The focus will also be on Average Hourly Earnings and if payrolls and wage growth surprise to the downside, the USD is in trouble.

As the expectations are very high, trading is very risky at the time when payrolls are due for release. Traders should therefore use a proper risk management in order to avoid disappointments.

Non-Farm Payrolls are scheduled for release at 13:30 GMT.

Have a nice weekend.

Daily Forex signals:

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