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Will Yellen’s Final Move Depreciate The USD?

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Dear Traders,

It’s decision day at the Federal Reserve and what makes this final policy decision of the year a significant meeting is not the anticipated rate hike, but the monetary policy outlook for 2018. While the market is certain of a third 2017 hike, the focus will turn to forecasts for the pacing through 2018. We will therefore keep an eye on the dot-plot in order to shape expectations for next year’s rate hike path. If the Summary of Economic Projections (SEP) projects another three or possibly even four rate hikes ahead, the dollar will further rally. However, it is very unlikely that the Fed surprises the market and accelerates its pace. Hence, there is a risk of disappointment today, which could lead to a sell-off in the dollar. We recommend preparing for heightened volatility during the entire North American trading session, while most price action will take place around the FOMC decision and press conference, as well as the CPI reading that will be due before the rate decision.

For Fed Chair Janet Yellen it will be her final quarterly press conference before she steps down in February. It is therefore unlikely that she will signal any new prospects on the Fed’s guidance.

13:30 USD Consumer Price Index (CPI)

19:00 USD FOMC Rate Decision

19:30 USD Yellen Holds Press Conference

(Time zone UTC)

Yesterday’s price performance in both EUR/USD and GBP/USD was not to our liking as both currency pairs failed to pick a clear direction despite the broad-based strength in the USD. Technically speaking, the picture has not changed.

GBP/USD: The cable refrained from a break below 1.33 and we currently focus on a price range between 1.3450 and 1.3220. Yesterday’s better-than-expected U.K. inflation data failed to lift up the currency but if investors take profit on dollar positions today, we could finally see some corrective movements driving the pair higher before the holiday liquidity drain.  

EUR/USD: The euro remained well above 1.17 and as long as there is no clear break below 1.1680 the euro could head for another test of 1.1790. Below 1.1680 we focus on lower targets at 1.1640 and 1.16.

We wish you good trades for today.

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EUR/USD Remains Below 1.18, GBP/USD Faces 1.33

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Dear Traders,

The euro ended the trading day virtually unchanged against the U.S. dollar after a bullish reversal towards 1.18 has proved short-lived. We now expect the EUR/USD to trade lower towards 1.1680 unless we see a sustained break above 1.18 and farther 1.1840, which would shift the bias in favor of the bulls.

The GBP/USD followed its short-term upward trend channel (see yesterday’s analysis) and rose to a high of 1.3280. If the cable is able to hold above 1.32 we expect further gains towards 1.3310 and possibly even 1.3325. But irrespective of the technical outlook, any new Brexit headlines or speculation about the Brexit progress will affect the cable’s price action in the near-term.

Sterling traders should keep an eye on the Bank of England testimony at 10:00 UTC. Several BoE officials are scheduled to testify before Parliament and if there are indications of further monetary policy normalization in 2018, the pound could soar.

Federal Reserve Chair Janet Yellen is scheduled to speak later today at 23:00 UTC but her comments may have little impact on the greenback’s price action as she announced her retirement from the Fed in February after Jerome Powell has been sworn into office.

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We wish you good trades and many pips!

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Euro Drops Below $1.18

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Dear Traders,

The euro weakened against the U.S. dollar in the aftermath of the German election results while the important support area around 1.1830-1.18 remained unbroken until this morning. As mentioned in our yesterday’s analysis, for the bullish bias to diminish the euro must break below 1.1830/20, the neckline of a head-shoulders pattern that was formatted since late August. Below 1.1820 we will focus on a lower target at 1.1775, from where potential pullbacks may occur. A current resistance is however seen at 1.1990.

Today’s focus shifts to comments from central bank policy makers with most attention being paid to Fed Chair Yellen who is scheduled to speak on inflation, uncertainty and monetary policy at 16:45 UTC.

Elsewhere, the war of words between the U.S. and North Korea continues to pose a threat to the markets. While the market shrugs off escalating tensions between America and North Korea, the recent escalation in rhetoric raises risk of tactical missteps.

The British pound extended its recent slide against the greenback and fell to a low near 1.3430. The latest weakness phase of the pound can still be considered as consolidation within the overall uptrend but if GBP/USD falls below 1.3380 we anticipate further losses towards 1.3330 and possibly even 1.32. On the topside, we will wait for a break above 1.36 in order to focus on higher targets at 1.37.

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We wish you good trades and many pips!

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All Eyes On Theresa May Speech

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Dear Traders,

The U.S. dollar’s recovery turned out to be only short-lived with the British pound and euro regaining some ground against the greenback Thursday. The British pound has proven to be the best performing currency in September so far but storm clouds could gather over the currency. The pound’s recent strength has been based on the hawkish shift in the Bank of England’s monetary policy stance. Consequently, the market has begun to price in a potential BoE rate hike later this year. However, even if a change in monetary policy is an important driver in the market, there is also another fundamental driver that can change everything: Brexit. The U.K.’s divorce from the EU could cloud the outlook for the country’s economy and its currency. In a nutshell, future monetary policy decisions will depend on the Brexit theme which still represents the biggest uncertainty factor for the United Kingdom.

U.K. Prime Minister Theresa May is scheduled to provide an update on the Brexit theme in her speech in Florence today at 19:00 UTC. So far, no breakthrough was reached after three rounds of negotiations between the UK and EU. May’s speech is, however, expected to strike a positive tone and this optimism is reflected in the pound’s upward movement. Theresa May is expected to offer up to 20 billion pounds to retain access to the single market. Should her speech reinforce confidence that Brexit will brighten for the UK, the pound will benefit and could further rise. If May, however, confirms that the troubles remain, the pound could crash.

We currently see GBP/USD trading within an upward trend channel between 1.3690 and 1.3470. While today’s price development could be oriented toward these barriers, the pound’s direction will depend on May’s speech. We expect higher volatility around that speech.

 

Investors may also keep an eye on speeches by Federal Reserve officials and ECB President Draghi today. While Draghi refrained from touching on the ECB’s monetary policy in his speech yesterday he may offer further clues about tapering today.

The EUR/USD traded with a tailwind and we now focus on higher targets at 1.20 and 1.2050. A current support is however seen at 1.1870.

On Sunday September 24, Germans go the polls and this German election could also matter for the rest of Europe and thus the euro. If big chances are taking place, the euro will respond on Monday morning when markets open. Let’s be surprised.

We wish good trades and 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 2017 Maimar-FX.

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NFP Outcome Will Seal The Dollar’s Fate

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Dear Traders,

The BoE’s Super Thursday is behind us and we got what we were looking for: A breakout in GBP/USD. Our forecast of further bearish momentum toward 1.3110 following a break below 1.3190 proved to be correct. Thus, sterling bears were able to pocket a nice gain yesterday. What prompted the pound to decline? The Bank of England’s monetary policy committee voted 6-2 to keep interest rates unchanged but more importantly, policy makers lowered their economic growth projections to 1.7 from 1.9 percent. Furthermore, the BoE cut its forecast for wage growth for 2018 and 2019. The market was betting on a surprise hawkishness but what it got was some uncertainty when Carney expressed concerns about a “smooth transition to a new economic relationship with the EU”. While he also pointed towards some tightening in the next three years, yesterday’s policy statement was interpreted as negative.

The euro favored the upward movement after correcting towards 1.1830. Based on the recent uptrend we generally expect further gains towards 1.1960 and 1.20. A break below 1.1850 however, could send the euro towards its lower support at 1.18.

The pound now faces a crucial support at around 1.31. A significant break below that barrier may result in further bearish momentum towards 1.30.

All eyes will be on the U.S. employment report scheduled for release today at 12:30 UTC. Market participants hope that the NFP report will provide clues on the strength of the U.S. economy and the Fed’s next policy move. So the U.S. Dollar’s fate will depend on the NFP outcome. Let’s be surprised.

If you want to know how we will trade the payrolls, sign up for our daily signal service here.

We would like to inform all subscribers and readers that we will take a summer trading break until end of August. Our signal service and all daily analysis will be resumed in September.  

We wish you a very enjoyable summer.

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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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EUR/USD: Is The Euro’s Uptrend Now Running Out Of Steam?

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Dear Traders,

If you recently bought euros against the U.S. dollar, you were exactly right and produced most probably solid black figures. We were able to turn in a good profit thanks to the solid performance of the euro. The euro rose to a fresh high of 1.1583 but the fact that a next crucial resistance zone soars around 1.16-1.1625 could limit further gains which is why the euro’s uptrend could now begin to lose momentum. However, euro bulls might tend to test that resistance before taking profit but we now anticipate a higher likelihood for a steeper correction in the EUR/USD. We expect next short-term supports at 1.1515 and 1.1480 followed by a more meaningful support area around 1.14.

The British pound came under increased selling pressure after U.K. inflation came in below expectations. The short-lived break above 1.3120 finally proved as false break-out as it happened before inflation figures were due for release. We now expect GBP/USD to trade between 1.3080 and 1.2960 but if the pound climbs again above 1.3115, we may see another leg up targeting at 1.32.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Further U.S. Dollar Weakness Expected

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Dear Traders,

We hope you successfully weathered the first day of Yellen’s testimony and the currencies’ whipsaw performance.

The Federal Reserve Chair sounded slightly more cautious on the inflation outlook while saying the U.S. economy should continue to expand over the next few years, allowing the central bank to stick to its path of higher interest rates. In the Q&A session, Yellen indicated the Fed is still considering risks around the inflation outlook while inflation is running below the Fed’s 2 percent target. Concerning the Fed’s balance sheet, Yellen mentioned that the central bank anticipates it will start reducing its balance sheet “this year” while the size of the balance sheet is uncertain.

The Fed chair will continue testifying today at 14:00 UTC before the Senate Banking Committee.

In short, Yellen’s comments suggest that the Fed is in no rush to tighten monetary policy because of too-low inflation, even though the U.S. economy is in good shape. This slightly less hawkish tone bodes well for U.S. stocks but weakens the U.S. dollar.

Traders of the EUR/USD now might argue that the U.S. dollar strengthened instead in the aftermath of the testimony. One reason for the euro’s short-term decline might be speculation the ECB could follow the Fed’s low inflation expectations and may put the awaited taper in question, at least in the near future.

For our part, we expect the EUR/USD to strengthen, heading for a test of 1.15. Euro bears should however wait for a break below 1.1380 or, on the other hand, sell euros at higher levels following a test of 1.15.

As expected, the GBP/USD received a boost from stronger-than-expected U.K. labor market data and started its relief rally towards 1.29. If the pound breaks above 1.2930 we expect further gains towards 1.2970 and possibly even 1.3020. A significant break below 1.2850 however, could spark bearish momentum towards 1.28.

If you want to know how to exactly trade EUR/USD and GBP/USD including an appropriate money management per trade and day, sign up for our daily signal service here.

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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

 

 

 

EUR/USD Forecast Met; Focus Now On Further Upside Momentum

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Dear Traders,

We got what we were looking for in yesterday’s analysis: A breakout in the EUR/USD. The euro broke out of its narrow trading range and surpassed the 1.1445-barrier. Our long entry has thus proved a success. We are now looking for additional upside in this pair and look at higher targets at 1.15, 1.1530 and 1.1580. With the EUR/USD gradually approaching overbought territory we also anticipate pullbacks which may drive the euro back toward 1.1415. With the euro remaining above 1.1460 however, there is no cause for concern for euro bulls, at least for a while.

Federal Reserve Chair Janet Yellen gives testimony today and tomorrow with market participants looking for guidance on when the Fed could start shrinking its balance sheet. Ms. Yellen is due to start her prepared remarks at 12:30 UTC followed by Q&A at 14:00 UTC. Yellen’s testimony is the prime monetary policy event for dollar traders and so we expect higher volatility in all USD crosses.

The British pound depreciated against the U.S. dollar Tuesday and fell toward a low of 1.2830. The catalyst for the decline was a speech by Bank of England Deputy Governor Broadbent who refrained from commenting on interest rates. Broadbent instead warned of Brexit risks and hence the pound weakened as the market has hoped that there would be anything hawkish in his speech.

From a technical perspective, we now expect the GBP/USD to trade with a tailwind since the pair refrained from a break of its recent downtrend channel. Based on that channel, it could be time for a pullback and hence upcoming bullish momentum toward 1.2920. Let us be surprised.

The U.K. Labor Market report is scheduled for release at 8:30 UTC and could have an impact on the pound. Signs of stronger job growth may encourage the BoE to start normalizing monetary policy. Stronger job/wage growth figures would thus have a positive impact on the pound sterling.

We wish you profitable trades for today!

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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

 

 

 

Will Payrolls Hurt Or Help The U.S. Dollar?

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Dear Traders,

It’s payrolls day and the euro already started to show some bullish price action ahead of the highly anticipated U.S. jobs report. In our analysis of Thursday we highlighted the chance of a bullish continuation in the EUR/USD and this is precisely what has happened yesterday. The euro was Thursday’s best performer and rose toward 1.1425 on speculation the European Central bank is slowly starting to prepare the market for stimulus tapering.

All eyes now turn to the NFP report which is scheduled for release at 12:30 UTC. While the ADP report fell short of expectations, there is a risk that also NFP data miss and this would be poison for the U.S. dollar. The jobs report is expected to show 178K workers in June while wage growth is expected to have strengthened. If the headlines figures exceed expectations we could see the greenback strengthening but we bear in mind that any disappointment will have a greater impact on the market.

As usual, we will prepare for both bullish and bearish scenario but recommend not investing too much – at least ahead of the payrolls report. If you want to know how to trade the payrolls report and how to adjust your money management, sign up for our signal service here.

We wish you profitable trades and a relaxing weekend.

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/

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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

 

 

 

Pound’s Upward Movement Could Be Limited

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Dear Traders,

It has been a profitable trading day for sterling bears and so we were able to benefit from the fall in the pound while our short trade has hit all profit targets. The pound slid to a low of 1.2638 on political uncertainty following last week’s snap election.

The most important piece of U.K. data will be the Consumer Price report scheduled for release at 8:30 UTC. CPI data is expected to print 2.7 percent in May, unchanged from the prior month. A disappointing CPI figure could however increase the pressure on the pound.

GBP/USD

Watch out for higher resistances. From a technical perspective, there could be an upper barrier at around 1.2730/40, a level from where sellers may take the opportunity to sell pounds. If that barrier proves correct, we will shift our focus to the 1.2635-mark. A break of that support level may result in a steeper slide towards 1.2530.

The euro traded more or less unchanged against the U.S. dollar on Monday. Germany’s ZEW survey, due for release at 9:00 UTC will draw euro traders’ attention. However, given the euro’s recent sideways trading range, gains might be limited until 1.1270/80.

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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