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DAX Technical Outlook

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The cable tested the 1.3550-resistance area again but bullish momentum was not strong enough for a push higher towards 1.36. In case of a break above 1.3575, we expect the GBP/USD to head for a test of 1.36 and possibly even  1.3625. Falling however below 1.34, the sentiment could change in favor of the bears.

The EUR/USD trended downwards toward 1.1260. For bearish momentum to gain strength we will wait for a sustained break below 1.12.

On Friday we will have fresh U.S. payrolls data from December that could shed more light on the Federal Reserve’s potential pace of rate hikes. The Fed is expected to raise rates at least three times beginning in May to counter price pressures.

In terms of market moves, we will also keep an eye on today’s FOMC meeting minutes.

DAX – Stabilization above 16000 fuels hope for bulls

Our long entries have proved highly profitable over the last two days. The index stabilized above the crucial 16000-mark and thus bulls have an eye on a potential break of the 16300-high. As long as 16000 holds, there might be nothing in the way of a higher target at 16650.  A break below 16000 and further 15700 will however turn our focus to lower targets around 15300.

 

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Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

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USD Gains Traction With A Focus On FOMC Minutes

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As U.S. markets came back online after the July 4th holiday so did the U.S. dollar strength with the greenback accelerating against the euro and pound sterling on Tuesday.

While we expected some extended rebounds in both EUR/USD and GBP/USD, the round price levels at 1.19 and 1.39 have proved to be the limit so far.

EUR/USD: The euro reversed by just shy of 1.19 and is currently heading towards the south looking at the 1.18-level. If 1.1780 breaks, we will watch out for falling prices towards 1.1730/1.17. Resistances are seen at 1.1950 and 1.20.

GBP/USD: After sterling bulls were unable to push the pound above 1.39, the price retraced, marking an intraday low at 1.3772. We still see a crucial support at 1.37 from where we could see some rebound but if bears are strong enough to push the pair significantly below 1.3670, traders should expect steeper losses towards 1.35. We still see a small resistance at around 1.3920.

Traders will pay attention to the Federal Reserve meeting minutes today at 18:00 UTC for more clues on when the Fed may begin tapering its stimulus. The dollar could thus gain some traction ahead of the release.

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EUR/USD With a Tailwind While GBP/USD Tests 1.38-Support

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The euro stabilized against the U.S. dollar Tuesday and EUR/USD saw a small rebound towards 1.1880.  If the pair is able to hold above 1.18 in short-term time frames, we may see a rise towards 1.1950 and possibly even 1.20.

GBP/USD on the other side, saw a correction towards 1.38 and it will be interesting whether that support area holds. Falling below 1.38, a next lower support is seen at 1.3750.

The FOMC meeting minutes today at 19:00 UTC may spur some volatility in USD crosses but we do not expect the minutes to serve as a catalyst for big moves. The Fed’s March rate decision came and went without any significant change as monetary policy is kept on hold.

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Prepare For Corrections Around U.S. CPI And FOMC Minutes

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Dear Traders,

The U.S. dollar continued its recent weakness ahead of today’s U.S. CPI numbers. Subsequently, the EUR/USD was accompanied by a bullish tilt and rose towards 1.2380. Long traders in the euro were thus able to book a good profit by trading our long entry.

It will now be interesting for traders of the EUR/USD as the currency pair could be primed for a technical breakout. If the euro rises above 1.2370/80 we see chances of an extended upward move towards 1.2430. A significant break below 1.2350, however, could shift the short-term bias in favor of the bears with lower targets at 1.2330 and 1.2310. A break below 1.23/1.2290 could even alter the current sentiment from bullish to bearish.

The British pound stabilized above 1.4150 against the dollar and now faces the 1.42-barrier. A break above 1.4225 could lead to further strength towards 1.4270. Bears in the GBP/USD should, however, pay attention to a significant break below 1.4080, which could drive the pair towards 1.4025.

Today, the focus will return to economic data and the outlook for U.S. consumer prices (due for release at 12:30 UTC). Later in the day we have the FOMC minutes scheduled for release, so there could be some volatile movements around these releases. Bear in mind that the Federal Reserve is optimistic concerning further rate hikes this year, so the minutes could underline that positive outlook which would be dollar-positive. In other words, prepare for corrective movements around the CPI and FOMC release.

Apart from U.S. data, sterling traders will watch the U.K.’s Industrial Production numbers due for release at 8:30 UTC, while euro traders will listen to a speech of ECB President Mario Draghi at 11:00 UTC.

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Can FOMC Minutes Fuel Demand For Dollars?

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Dear Traders,

The U.S. dollar’s relief rally has lost some momentum with both EUR/USD and GBP/USD heading upwards. From a technical perspective it is noteworthy that the important resistance levels in both major currency pairs are still unbroken, at least for now. The greenback may receive attraction ahead of the FOMC meeting minutes which are scheduled for release today at 18:00 UTC. Bearing in mind that the Federal Reserve plans to raise interest rates one more time this year followed by another three hikes next year, the minutes should confirm the hawkish outlook. While this alone is dollar positive we have to consider that a December rate hike has been largely priced in by the markets. Thus, the minutes could possibly be a non-event for traders today but let us be surprised.

On the flipside, the euro received some support from Catalonia’s president Carles Puigdemont who stepped back from an immediate declaration of independence from Spain. He said he would “suspend” the referendum result for a period of some weeks for dialogue with Prime Minister Mariano Rajoy’s administration. The euro rose towards its resistance area at 1.1830-40 but as long as that barrier remains unbroken, we expect the euro to drop back towards 1.1775 and possible even 1.17.

The British pound touched the lower bound of its current resistance zone ranging from 1.3250 to 1.3220. In short-term time frames we see the cable formatting a potential double top pattern which could predict upcoming bearish momentum, provided that the cable remains below 1.3230. A break below 1.3175 could reignite bearish momentum driving the pair towards 1.3130.

Apart from the FOMC minutes there are no major drivers in the market today. Let us wait to be surprised.

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No Hope For Dollar Bulls?

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Dear Traders,

We welcome you to a new trading week. Last week ended with a spike high of 1.1212 in the EUR/USD while continuing U.S. dollar weakness remains the dominant market theme. The greenback still struggles to gain ground as political instability fears weigh on the Federal Reserve’s rate hike outlook. Investors fear that political chaos in the Trump administration may derail Trump’s plans for expansionary fiscal policy and thus deter the Fed from raising interest rates.

However, not all hope is lost for dollar bulls and if political uncertainties are abating, shifting the focus back to the administration’s fiscal program, the U.S. dollar could be poised for recovery. In the meantime we will mainly pay attention to the technical outlook in both major currency pairs.

The economic calendar this week is rather light in terms of market moving data. From the U.S., the most interesting pieces of data will be Friday’s GDP figures and Durable Goods Orders following Wednesday’s FOMC meeting minutes. Upbeat minutes may revive the dollar trade with market participants pricing in a more than 80 percent chance that the Fed will raise rates again in June.

The EUR/USD knew only one direction: upwards. From a technical perspective we now expect a next hurdle to come in around 1.13. Below 1.1070, however, the euro may drops towards a test of the 1.10-support.

The cable remained sideways whilst being accompanied by a slight upward tilt. We now expect the GBP/USD to trade between 1.3060 and 1.29.  A break above 1.3070 may send the pound towards 1.32.

Sterling traders should pay attention to any changes in the U.K. GDP figures, scheduled for release on Thursday.

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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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January Is Typically Dominated By U.S. Dollar Strength

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Dear Traders,

The U.S. dollar jumped to the highest level in 14 years against the euro as U.S. manufacturing expanded. From a seasonality perspective, January is the greenback’s best month of the year and thus typically a bearish month for the EUR/USD. Looking back at the past performance, this pair has usually depreciated in January, making it an attractive opportunity to sell the pair on dips.

The euro touched a fresh low at 1.0340 but ended the trading day slightly above 1.04. From a technical perspective, we expect the EUR/USD to trade between 1.05 and 1.0370 in short-term time frames.

The British pound tested its 1.22-support which has proved intact for the time being. If the pound falls below that level we anticipate a lower support-level at 1.2150/30. Above 1.2310, however, sterling may head for a test of 1.2350 and 1.2380.

Today, the focus shifts to the Eurozone Consumer Price report, due for release at 10:00 UTC and the FOMC minutes of the Dec. 13-14 meeting, scheduled for release at 19:00 UTC. However, the Federal Reserve minutes are not expected to be a big market mover since Fed officials are unlikely to reveal anything new about the timing of the next policy move. Economists will also be looking for insights into policy maker’s thinking about fiscal policy changes under President-elect Trump and how they might react to measures. Nonetheless, the central bank will probably maintain a wait-and-see mode as too much remains uncertain.

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

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Quiet Trading Over US Thanksgiving Holiday?

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Dear Traders,

The market’s sentiment was recently strongly influenced by political events and while political risks in the Eurozone continue to build up, the euro went into a tailspin. With the Italian constitutional referendum coming in on December 4, the situation for the euro may deteriorate as political risks are rising across Europe.

Trump’s win seems to have reinvigorated populist sentiment across the continent and if the UK can Brexit, the US can elect Trump, it is also possible that France and Italy could pull out of the EU. In this uncertain political environment, the euro remains vulnerable to losses. However, bearing in mind that the euro is oversold in short-term time frames, we expect some corrections in the EUR/USD.

The economic calendar this week is rather light in terms of market-moving data. The U.S. Thanksgiving holiday on Thursday usually leads to low liquidity in the market, which is why we do not expect significant market movements this week. The only interesting piece of U.S. data will be Durable Goods Orders on Wednesday followed by the FOMC Meeting Minutes which are expected to confirm the hawkish tilt of the Federal Reserve. Everything else than a Fed rate hike next month would be a big surprise.

From the Eurozone, we have the PMI Report (Wednesday) and the German IFO Report (Thursday) due for release this week. Furthermore, ECB President Mario Draghi speaks at the European Parliament in Strasbourg today at 16:00 UTC.

Technically we expect the EUR/USD to trade between 1.07 and 1.0530 in the near-term while a break above 1.0720 may invigorate some bullish momentum towards 1.0770 and 1.08 whereas a break below 1.0520 would increase the pressure on the currency pair.

GBP/USD

The pound sterling dropped towards 1.23 and sterling bears are eager to see whether the cable will break below that crucial support. After a break below 1.23 we see a next lower target at 1.2150. A break above 1.2550 however, would shift the bias in favor of the bulls.

chart_gbp_usd_daily_snapshot21-11-16

From the U.K. , the only interesting piece of economic data will be the Autumn Budget Statement (Wednesday) and Friday’s GDP Report.

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.

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Another day without Big Moves

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Dear Traders,

And once again it was a trading day without huge market moves and there were no significant break-outs. The cable marked a new resistance at 1.5370, but generally followed its recent upward trend. The euro, on the other hand, remained firmly within its narrow trading range. Nevertheless, traders were able to gain a small profit with our long-entry, even though gains were not as huge as we had hoped for.

Why did the minutes fail to trigger bigger moves?

The Bank of England’s MPC minutes came in less hawkish than expected. BoE policy makers voted 8-1 to keep the benchmark rate at 0.5 percent and signaled to keep rates steady as long as inflation weakness persists. According to the minutes, price growth will probably stay below 1 percent until spring 2016, which is longer than anticipated. Investors had hoped for any signals with regard to an earlier rate hike.

The overall tone of the FOMC minutes was not sufficient enough to spur the U.S. dollar’s momentum. Federal Reserve policy makers delayed an interest rate increase last month because of downside risks to inflation and a further strengthening of the dollar, which could be caused by growing risks from China. However, officials continued to say that they were on track to raise rates later this year. Projections showed that 13 of 17 FOMC members forecast a rate hike by year’s end. Market participants anticipated a more hawkish tone and given the recent slack in the labor market, investors saw little reason in the minutes to expect a Fed rate hike soon.

Today there are no important economic reports scheduled for release. U.K. Trade Balance, scheduled for release at 8:30 GMT and U.S. Wholesale Trade Sales, due at 14:00 GMT are second-tier reports, which could have a limited impact on the currencies.

We wish you a wonderful 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 2015 Maimar-FX.

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Euro is losing strength – GBP at lofty height

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Dear Traders,

After the euro’s brief rebound against the greenback, the common currency failed to extend its gains. We believe that the upside potential in the EUR/USD could be limited ahead of the highly anticipated FOMC meeting next week. A current resistance is seen at 1.1215 and euro bulls would need to clear that hurdle significantly in order to revive fresh bullish momentum towards 1.1270. However, we generally favor a bearish bias on the euro and expect the downward pressure to increase in the near term.

The British Pound experienced a significant recovery against the U.S. dollar. Ahead of tomorrow’s BoE monetary policy announcement, investors might be risk-averse, dampening the demand for sterling. As long as GBP remains below its next resistance at 1.5435, we expect the currency to be vulnerable to bearish corrections.

U.K. Industrial Production and Trade Balance are scheduled for release at 8:30 GMT. Apart from that, there are no major economic reports due for release today.

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