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Market Ignored FOMC Minutes, U.S. Dollar Strength Is Still Awaited

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Dear Traders,

Following the FOMC minutes, nothing has actually happened in the market and it appears that market participants have completely ignored the possibility of a Federal Reserve rate hike at the upcoming meeting. The minutes showed that Fed officials see a hike ‘fairly soon’, confirming the hawkish bias while nothing in that report directly suggested that a March hike is off the table. The market however, has interpreted the minutes to be less hawkish as Fed policy makers expressed confidence they can take their time raising interest rates as there is little risk of an overshooting of inflation.

In summary, yesterday was none of our favorite trading days as we have hoped for larger market movements and more profitable swings.

The euro bounced off the 1.0490-support and recovered some losses after the U.S. dollar failed to gain strength from the minutes. We now expect the EUR/USD to trade within a range of 1.0615 and 1.0450.

The technical picture in the GBP/USD remained virtually unchanged with the pound continuing to trade sideways. The risk is however tilted to the downside and if the pound drops back below 1.2425 we see a higher possibility of upcoming bearish momentum towards 1.2385 and 1.2350. On the upside, we will wait for a significant break above 1.25 in order to shift the focus towards higher price levels.

There are no major economic reports scheduled for release today and thus the price action could hinge on the appetite for USD. Given the fact that the Fed is currently the only central bank that is on track to raise rates, we generally expect further strength in greenback.

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Quiet Trading On Thanksgiving?

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Dear Traders,

The FOMC minutes did not provide any new insights but did confirm the market’s assumption that a December rate hike should be a done deal. The minutes showed that Federal Reserve officials saw a strengthening case to raise interest rates as the labor market improved ‘appreciably’, with some saying a hike should take place next month. The U.S. dollar extended its gains versus the euro while the common currency fell to a fresh one-year low.

As stated in yesterday’s analysis, we now see next support levels at 1.0520 and 1.0470 and if these barriers fall, the next stop could be at parity. A current resistance is however seen at 1.06.

U.S. markets will be closed for Thanksgiving, which is why we expect market movements to be limited amid a low liquidity environment. Let’s see.

The only piece of economic data will be the German IFO index due at 9:00 UTC, which could have a minor impact on the euro.

The British pound remains the only major currency to outperform the U.S. dollar and traded resiliently between 1.2470 and 1.2360. Sterling traders were looking in vain for any profitable movements and so we had to record some losses after three failed sell attempts. However, the technical picture has not changed and we still wait for a break of 1.2515 or 1.2350 respectively.

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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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U.S. Dollar Consolidates Within Quiet Trading Environment

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Dear Traders,

While Friday’s payrolls data came in below the market’s expectations it had only little impact on the performance of the U.S. dollar. Non-farm payrolls rose by 156K last month while the jobless rate ticked up to 5.0 but the small slowdown was not expected to prevent the Federal Reserve from raising rates in December. The dollar slightly weakened against its counterparts after Friday’s data but the short-term correction does not change the overall picture.

The economic calendar this week is very light in terms of market moving data. From the U.S. we only get the FOMC minutes (Wednesday) and the Retail Sales report (Friday). Moreover, the focus will be on Fed speak, here in particular on Fed chair Yellen who is scheduled to speak on Friday.

EUR/USD

The euro remained firmly above 1.11 but gains were capped at 1.12. With no market moving data we expect the currency pair to remain confined to a trading range between 1.1250 and 1.11. Below 1.1090, however, we expect the euro to fall towards lower targets at 1.1050 and 1.0950.

GBP/USD

The cable formatted a current trading range between 1.2450 and 1.2350. Above 1.2480 we see chances of a move towards 1.26 while a renewed break below 1.23 may invigorate further bearish momentum.

Trading could be quiet on Monday so we recommend taking profits even at smaller levels if possible.

We wish you a good start to the new week and good trades!

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Additional daily and long-term 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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Pound In Free Fall Amidst Uncertainty

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Dear Traders,

The free fall of the British pound continues with the U.K. economy facing difficult times in the aftermath of Britain’s vote to leave the EU-bloc. The huge sell-off in the pound was the biggest story in the market yesterday and it continued even during the Asian trading session, sending the pound to a record low of 1.2797. The effects of Brexit on the U.K. economy and its confidence are becoming more and more evident. Meanwhile, Bank of England Governor Mark Carney outlined more tools to contain the Brexit fallout, pledging to implement any other measures needed. Carney warned of prospects for “a material slowing of the economy” amid concern over the health of the global economy.Given the high level of uncertainty in the U.K. commercial property market, three of the U.K.’s largest real estate funds have frozen almost 9.1 billion pounds of assets to halt Brexit retreat. All in all, the pound’s future does not look bright and traders should expect further losses given the uncertain environment. Dark clouds are gathering on Britain’s horizon and this is only the beginning.

Given the pound’s sharp depreciation, investors seek for safer assets, flocking into the U.S. dollar. The euro dropped towards 1.1035 as a result of that risk aversion. A next important support is seen around the 1.0990-level. Below 1.0980, we expect the euro to fall towards 1.0940 and 1.0870. On the upper side, the euro rejected the 1.1186-level, from where it went into a tailspin. With the 1.12-resistance being intact for the time being, euro bulls should wait for a break above 1.1215/20 in order to buy euros towards higher targets.

Market participants pushed back their bets for a Federal Reserve rate hike this year, even though the Fed is likely to stay on track to raise interest rates if growth and inflation expectations are met.

The Fed releases minutes from its June 14-15 FOMC meeting, but the FOMC minutes are expected to take a backseat to heightened concerns about global growth and risk aversion.

The ISM Non-Manufacturing Index, scheduled for release at 14:00 UTC will be watched closely whereby a better figure could add further strength to the greenback.

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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

 

 

 

Will Draghi Liberate The Euro From Its Narrow Trading Range?

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Dear Traders,

We can call the latest FOMC minutes a non-event for traders as the minutes revealed nothing fundamentally new. Several Federal Reserve policy makers argued against an April interest rate hike while some favored it. Although the minutes reflect inconsistency in terms of the timing of rate hikes, the Fed’s fundamental stance remains more hawkish than dovish. All Fed officials agreed on the relative health of the U.S. economy amidst persistent global risks. Nonetheless, several officials advocated a cautious approach as they worried that slowing global growth could hurt U.S. exports and reduce corporate investments.

While market participants see no chance of an April hike the odds increase slightly for a June hike but first top 50 percent for a rate increase in December. The market has a difficulty in pricing in rate hikes for 2016 but if future U.S. data show that the economy continues to improve, the dollar will begin to rally.

The British pound confirmed its bearish bias and showed that there is still room for a further decline ahead of the upcoming U.K. referendum in June. The currency pair tested the 1.40-support but was able to recover most of its losses towards the end of the day. For any bullish engagements the 1.4175-level should be of primary interest as a break above that level could send the pound towards 1.4230. However the trend is down and if GBP falls back below 1.4080, we could see another dip lower.

The euro is still captured between 1.1430 and 1.13 and every attempt to break significantly above 1.14 has resulted in a reversal. Once the 1.1440-level has been breached to the upside we might see an attempt to test the 1.1480/1.15 level. However, if the pair remains below 1.14 we will favor a bearish stance and focus again on a break below 1.1335 and further 1.13. A break below 1.1285 could drive the euro as low as 1.1240/20.

Chart_EUR_USD_4Hours_snapshot7.4.16

The most important risk event for the euro will be the speech by ECB President Mario Draghi in a meeting at the Council of State in Lisbon, Portugal. The speech is scheduled for around 14:00 GMT. The risk for the euro is to the downside as Draghi might take the opportunity to put pressure on the common currency.

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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

 

 

 

The Lack Of Market Moving Data Could Result In Sideways Motion

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Dear Traders,

Friday’s U.S. labor market report showed that the economy is still performing well overall. While the unemployment rate rose to 5 percent from 4.9 percent as more people entered the labor force, closely-watched average hourly earnings increased 0.3 percent. The uptick in wages and a solid 215k gain in payrolls add confidence that the U.S. economy will hold up against slowing global growth. The U.S. dollar strengthened in response to the report but gains were limited in the EUR/USD, whereas the cable came under increased pressure on the back of a weaker manufacturing PMI and amid concern that economic and political uncertainty could deter investment inflows from overseas.

As expected the short-term uptrend in the British pound has been reversed and the focus returns to the next support levels at 1.4150 and 1.4050. Short-traders efforts paid off last Friday as our short-entry proved to be profitable and reached our target of 90 pips. Before shifting our focus to next support zones at 1.4140 and 1.4120, the cable must break below 1.4170. After a break below 1.41 a next important support is seen at 1.4050. On the topside we expect upward movements to be limited until 1.4320 and 1.4345.

The euro marked a current resistance around the 1.1440-level. With a renewed break above 1.1415 we might see another test of that resistance level followed by a rise towards 1.1460 and further 1.15. Remaining below 1.14, we expect the 1.1350-level to lend a short-term support to the euro. However, below 1.1335 the focus will shift to the 1.13-barrier.

This week’s economic calendar is relatively light in terms of market moving data. Apart from the FOMC minutes on Wednesday we get some speeches from Fed Presidents throughout this week as well as a speech by ECB President Mario Draghi, scheduled for Thursday. The only important piece of U.S. data will be the ISM Non-Manufacturing index, due for release on Tuesday.

Sterling traders should pay attention to Tuesday’s PMI reports as well as Manufacturing and Industrial Production figures, due for release on Friday.

Today, the U.K. Construction PMI, scheduled for release at 8:30 GMT could have an impact on the British pound.

The FOMC minutes are not expected to be a big market mover as Fed Chair Janet Yellen has just reiterated the Fed’s approach to proceed cautiously in raising interest rates. Given that cautious outlook, the dollar could thus show further signs of weakness.

We wish all traders a good start to this week and many profitable trades.

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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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FOMC Minutes Could Fail To Be A Big Market Mover

/in /by

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:

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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

 

Dollar Weakens On Ambiguity About The Fed’s Tightening Path

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Dear Traders,

The FOMC minutes have revealed nothing fundamentally new. On the contrary, the overall picture of the minutes appeared somewhat dovish as the decision to raise interest rates was a “close call” among policymakers. While many Fed officials are confident that inflation would rise in the long-run, others expressed concerns about too-low inflation. Despite the committee’s unanimity to begin the policy normalization process, the expectations between Fed officials and the market regarding the future tightening path are diverging. Fed Vice Chairman Stanley Fischer said policymakers predict an estimated four interest increases throughout this year, while market participants believe that the Fed could disappoint with only two rate hikes.

Whatever the case, the U.S. dollar received no sustained support from U.S. economic data, whereupon the euro recovered some losses and climbed back above 1.08. Despite a strong uptick in ADP data, the greenback was not able to extend its gains against the euro. The British pound bounced off the 1.46-barrier but still remained below the 1.4650-hurdle this morning. We will therefore closely monitor the 1.4645-level. Once this level is breached on the upside, we could see sterling heading towards 1.4690 and 1.4725. Fresh bearish momentum may increase with a break below 1.46. A next support could be at 1.4565/55.

The euro might have difficulty breaking above 1.0840, where we see a next resistance. For euro bulls it might be smart to wait until prices exceed the 1.0860 level. On the bottom side, we see a current support at 1.0780/75, which should be significantly breached in order to sell EUR/USD towards 1.07.

There are no major important economic data releases today. Second-tier data such as Eurozone Retail Sales and U.S. Jobless Claims could only have a limited impact on the currencies.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2016 Maimar-FX.

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Will 2016 Be A Year Of Further Dollar Strength?

/in /by

Dear Traders,

Happy New Year! We hope you have had a good start into 2016 and wish you all the best for the New Year and, of course, many profitable trades.

At every beginning of the year many market participants wonder what they can expect from the new year. There has already been speculation as to whether the dollar rally will last another year or not. After three straight years of gains the odds are in favor of the U.S. dollar, even though the Federal Reserves’s monetary tightening cycle could weigh on U.S. growth. It will therefore be a challenge for the Fed to raise interest rates to an appropriate level which allows responding to economic setbacks. We generally expect the greenback to strengthen in the coming months as the Fed is forecast to continue raising interest rates. But as we all know, appearances can be deceptive and traders should bear in mind that both major currency pairs could be bottoming out if Fed officials begin to backtrack their hawkish views.

What is important for this week?

There are plenty of important data releases this week, but since the market participation may be slow in the first weeks of January, the impact of economic data could be limited. The focus will be on Consumer Prices from the Eurozone, scheduled for release on Monday and Tuesday. Furthermore, the Fed will release the FOMC minutes from its December meeting on Wednesday. The minutes are unlikely to have a significant impact on the dollar as the FOMC voting membership rotates every year, which is why some central bankers who voted for a rate hike last year are no longer voting members this year. Moreover, all eyes will be on the U.S. Employment data on Friday. If payrolls growth exceeds 200k alongside a strong rise in average hourly earnings, the dollar could be poised for further gains.

Let’s take a brief look at the technical side:

EUR/USD

The euro traded consolidated in a 1.10-1.08 trading range. We will need to wait for breakouts of this range in order to see fresh momentum. In the near-term we expect the euro being capped from 1.0950 and 1.10. A sustained break above 1.10 could invigorate bullish momentum towards 1.1050 and 1.11. On the bottom side the 1.08-level will be key and it would require unambiguous positive U.S. data to push the pair through this support.

Chart_EUR_USD_4 Hours_snapshot04.01.16

GBP/USD

Based on the recent bear trend we see a next important support area at 1.4635 and further 1.4560. However, given the latest strong downward move, chances are that sterling shows some corrections in the short-term. Current resistances are seen at 1.4850 and 1.4950.

 

Chart_GBP_USD_Daily_snapshot04.01.16

Important data for today:

8:55 EUR German Manufacturing PMI

9:30 UK Manufacturing PMI

13:00 EUR German Consumer Price Index

15:00 USA ISM Manufacturing

(Timezone GMT)

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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Euro recovered its losses after ‘No’ vote

/in /by

Dear Traders,

The euro slipped sharply to 1.0970 on Greece’s ‘No’ vote. Greece voted with a 61 percent majority against further austerity demanded by creditors, rejecting of further spending cuts and tax increases. While Prime Minister Alexis Tsipras described the result as a “great victory”, seeing himself with a strengthened hand now, the result also significantly raises the chances of a Greek exit from the currency bloc. The euro group must now decide if a financial rescue of the country is still possible.

Euro-area leaders called for an emergency summit on Tuesday. The European Central Bank is meeting today to discuss extending its emergency credits to Greek lenders. As long as negotiations are ongoing between Greece and the euro group the ECB is unlikely to cut the emergency liquidity for Greek banks. The next important date is the July 20 deadline, when Greece is due to pay 3.5 billion euros to the ECB. A non-payment could lead to drastic steps such as an exit of the euro-area.

Even if contagion for other peripheral economies in the euro zone is likely to be contained, investors could remain risk-averse and wait and see what happens now.

The British Pound traded lower against the U.S. dollar last Friday. We see a next support at 1.55. With a significant break below 1.5480, sterling may slide towards 1.5430 and further 1.5350. Current resistances are seen at 1.5650 and 1.5770.

Apart from eurozone financial stability risks in the near term, market participants will keep an eye on the U.S. monetary policy. The Federal Reserve releases FOMC minutes from its June 16-17 meeting on Wednesday. The Bank of England is scheduled to decide on monetary policy on Thursday.

The most important piece of economic data this week will be the ISM Non-Manufacturing Index, due for release today at 14:00 GMT.

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

Daily Forex signals:

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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 2015 Maimar-FX.

www.maimar.co