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BoE Decision: Is August Rate Hike Still In The Cards?

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Dear Traders,

The British pound ended the trading day little changed against the U.S. dollar after compromise has been reached between the U.K. government and Parliament on the progress of the EU Brexit bill. The pound’s rise to a high of 1.3217 proved short-lived and traders now wonder whether the 1.3140-level could give way to further bearish momentum. A lower target could be at 1.3080.

Today, all eyes will turn to the Bank of England rate decision at 11:00 UTC but there aren’t any actual expectations for a move at this meeting. The big question is rather whether the BoE begins to lay the groundwork for a possible rate hike in August. This is, however, not the most likely scenario.

After that rate decision, BoE Governor Mark Carney is due for his annual Mansion House speech and this may actually turn out to be a more proactive driver for the pound. Carney’s speech will be widely-watched for clues or hints around his expectations for the UK economy.

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Profitable Sell-Off In EUR/USD And GBP/USD

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Dear Traders,

After several days of sluggish price fluctuations, yesterday has proved to be a profitable trading day in particular for short traders of the EUR/USD and GBP/USD.

The British pound continued its slide versus the U.S. dollar on the back of worse-than-expected U.K. inflation data. The annual CPI fell to 2.4 percent from 2.5 percent while the core CPI fell to 2.1 from 2.3 percent. Lower inflation could keep interest rates lower for longer with the Bank of England being in no rush to tighten monetary policy sooner rather than later. Thus, BoE rate hike expectations are pushed back to November.

The pound marked a fresh support at 1.3305 from where a slight recovery started. As long as pullbacks are limited to 1.34 and 1.3450, sterling bears might retain control.

The euro fell below 1.17 after the weak PMI reading put further pressure on the single currency. We now focus on the 1.1810-level which could act as a short-term resistance. A break below 1.1650 could open the door for further losses towards 1.1620 and 1.1550.

The FOMC Minutes had only a limited impact on the dollar’s price action. With the markets widely anticipating a Fed rate hike in June the minutes were not expected to reveal anything new. The only note in the statement that weighed on the dollar was that “it was premature to conclude that inflation would remain at levels around 2 percent”.

Today we have U.K. Retail Sales scheduled for release at 8:30 UTC. Furthermore, BoE Governor Mark Carney is scheduled to speak at the BoE Markets Forum in London.

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We wish you good trades and many pips!

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Pound Slumps On Disappointing Inflation Data

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Dear Traders,

The biggest story in the Forex market on Wednesday was the sharp drop of the British pound. The pound extended its losses towards 1.4170 following the release of disappointing U.K. inflation data. Inflation fell to 2.5 percent, the lowest level in a year and investors fear that the lower reading could encourage Bank of England policy makers to postpone an imminent rate hike in May. Consequently, expectations for a rate hike next month dropped to a 65 percent probability, down from 87 percent.

GBP/USD

From a technical perspective, we saw the pound rushing through a previous support-area between 1.4250 and 1.4220 which turned into a current resistance now. A lower support now comes in at around 1.4145. However, traders should bear in mind that the overall uptrend is still intact and with the next BoE meeting (and a potential rate hike) still three weeks away, buyers may take the opportunity to buy pounds at lower levels.

We will keep tabs on a price range between 1.4250 and 1.4140 now. If the pound breaks out of that range we might see momentum accelerating to the respective direction. A lower support is seen at 1.4090, whereas for the bullish bias to resume it would need a renewed break above 1.4315.

The U.K. Retail Sales report is due for release today at 8:30 UTC.

In contrast to the high volatility in the GBP/USD, we have seen a lackluster price development in the EUR/USD. The pair is still range-bound and this long period of range (three months already) has discouraged many traders from trading the EUR/USD. However, there have been some profitable trading opportunities but larger swings tend to be rare at the moment.

We are still looking for an upside break of the 1.24-barrier and if that breakout happens our patience could pay off. Based on the recent uptrend channel we expect a higher bullish target to come in at around 1.2470. Bears in the EUR/USD should, however, wait for a significant break below 1.23.

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Copyright © All Rights Reserved 2018 Maimar-FX.

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British Pound Takes Breather On Carney Comments

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Dear Traders,

Monday has been a quite challenging trading day for traders of the EUR/USD and GBP/USD. While the British pound declined against the U.S. dollar after Bank of England Governor Carney’s comments were interpreted as more dovish following last week’s MPC statement, we have shot all our powder and finally missed out on the profitable bearish movement in the GBP/USD.

Carney reinforced the BoE’s view that the rate hike cycle in the U.K. will be “limited and gradual” and acknowledged that there was still clear concern over the health of the economy amid Brexit. His comments weakened the pound in the short term. GBP/USD traded consolidated and fell towards 1.3460. We now see a lower support at 1.34/1.3380 and if the pound drops below that level we may see a correction towards 1.33. On the topside, the 1.3620-level remains unbroken and sterling bulls may focus on a bullish break of that resistance level in order to buy pounds towards 1.38.

The euro traded sideways between 1.1970 and 1.1915. We now focus on price breakouts either above 1.1990 or below 1.1935. The German and Eurozone ZEW Survey are both scheduled for release at 9:00 UTC today and may have a slight 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 2017 Maimar-FX.

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British Pound Reacts With High Volatility To Opinion Polls

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Dear Traders,

The pound sterling is reacting with high volatility to fresh opinion polls ahead of the June 8 U.K. general election. After rallying towards 1.29, the pound dropped sharply as a poll showed Theresa May’s Conservative Party may miss a majority. With sterling’s direction being determined by opinion polls, the technical outlook currently seems to recede into the background. For sterling traders, Tuesday has been a profitable trading day with our long entry hitting the profit target exactly before the pound reversed towards lower levels. If the GBP/USD drops below 1.2790 there could be a next barrier at 1.2750 which needs to be significantly broken in order to spark fresh bearish momentum.  On the topside, we still expect a crucial resistance at 1.2980.

For euro traders, the upward trend proved successful with the euro testing the 1.12-mark. From a technical perspective, the euro seems to be formatting a downward channel with the lower barrier currently coming in around 1.11 while the upper barrier, which is currently seen at 1.12, may limit near-term gains in the EUR/USD.

The euro-area’s preliminary headline inflation rate will be released today at 9:00 UTC and the euro might come under some selling pressure ahead of this report as economists forecast a slightly lower reading.

From the U.S., we have Pending Home Sales at 14:00 UTC and the Fed’s Beige Book at 18:00 UTC scheduled for release.

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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 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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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

 

 

Bullish Bias On GBP/USD As BoE Policymakers Wait For August

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Dear Traders,

Investors were caught on the wrong foot as the Bank of England has held interest rates steady at 0.5 percent and thus refrained from prematurely responding to the clouded economic outlook. Market participants priced in more than an 80 percent probability the BoE would lower the rate in July and were therefore disappointed. The pound jumped more than 240 pips from our long-entry in an immediate response to the decision. However the focus now shifts to the BoE’s next monetary policy meeting in August when the central bank will make a full assessment with new forecasts in its inflation report. Until then the performance of the pound will be determined by risk appetite. Nonetheless traders should bear in mind that the pound remains a sell on rallies and it might be worthwhile therefore to sell the pound at crucial resistance levels.

Technical outlook GBP/USD (for subscribers):

The euro rose in tandem with the pound but gains were limited until the upper bound of the euro’s current trading range. Once the common currency is able to break above 1.1170 we could see a test of 1.1215 in a next step. However, the performance of the euro will be determined by risk appetite and U.S. data. The most important piece of U.S. data this week will be Retail Sales scheduled for release at 12:30 UTC alongside the Consumer Price report. Eurozone CPI data (9:00 UTC) is, however, not expected to have a significant impact on the euro as no changes are forecast.

Last but not least, Michigan Confidence is due for release at 14:00 UTC but the focus will be on retails sales and CPI figures.

We wish profitable trades for today and a beautiful 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 2016 Maimar-FX.

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Brexit! Will The Euro Crash?

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Dear Traders,

What can we say about the market today? Awesome, sad, impressive or the reaction was foreseeable? One thing is certain, however: Traders were able to get a substantial slice of the pie. From our point of view, the nighttime trading went very well. We achieved a reasonable profit with each of our entries in both currency pairs and we are therefore more than satisfied with our performance. Incidentally, our biggest single gain last night was a 420-pip profit, which was recorded by our short-entry in the GBP/USD.

The pound sterling crashed as the U.K. voted to quit the European Union. The first reaction has led to a massive sell-off in the pound. The euro moved in tandem with pound while the euro’s trading range was confined to 500 pips (5 percent), whereas the pound’s range extended to 1700! pips (17 percent). The pound’s downward move is the biggest drop of all time as Britain’s future is highly uncertain after the vote to exit the EU. The next steps are unclear, EU leaders and finance ministers could confer as soon as this weekend. The future path of the EU and U.K. is clearly subject to downside risk, this is the only (sad) certainty at the moment.

EUR/USD downside risks: If the euro breaks below 1.0890, a next support could be around 1.0820. Below 1.0780 the euro could tumble towards 1.0710 and 1.0560.

The storm in the Forex market is not yet over and traders should be cautious. If you already gained a good weekly profit then stop trading for this week. If you don’t mind getting your fingers burnt, then go ahead.

We say goodbye to this fateful week and 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 2016 Maimar-FX.

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Massive Increase In Volatility: Sterling Jumps 180 Pips This Morning

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Dear Traders,

Watch out for extreme volatility in the British pound with only two weeks to go before the U.K. referendum. Today’s sharp rise demonstrates the enormous potential despite uncertainties surrounding the U.K. vote. Only this morning we saw a higher likelihood for upcoming bullish momentum if the cable was able to break above 1.4480 but the cable came up first with its strong upward move before we published today’s analysis. The British pound has soared within seconds by 180 pips towards a high of 1.4661 but was not able to hold onto its huge gains. The currency pair remains vulnerable to high-volatile swings and traders should be prepared for huge breakouts at any time.

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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 And Cable: Muted Price Development

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Dear Traders,

There is nothing new to report as yesterday’s price development was anything but spectacular.

The euro hovered around the 1.15-level while gains were capped at 1.1530. Consequently, euro bulls’ efforts didn’t pay off and we suffered some losses with our long-entry. As expected, the 1.1510-1.1540 zone proved to be a short-term resistance for the EUR/USD and we will now wait for prices above 1.1540 or even better for a break above 1.1565 in order to buy euros. On the bottom side, the 1.1450-level remains in focus and euro bears might have to wait for prices below 1.1440 and 1.1430 before downward momentum may intensifies.

There are no important economic reports from the eurozone scheduled for release today. The only second-tier report from the U.S. will be Continuing and Initial Jobless Claims due at 12:30 UTC.

The British pound initially dropped towards 1.4460 but the downward move was not sustained and so GBP ended the day more or less unchanged against the U.S. dollar. The U.K. Services PMI is scheduled for release at 8:30 UTC and if data disappoints, sterling could fall towards 1.4430.

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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