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ECB Decision: No Rate Hike, No Surprises

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The recent rally in both euro and British pound has proved to be short-lived while the euro has tested the area around 1.07 before retreating whereas the pound did not even manage to climb above 1.23 before falling back below 1.21. Given geopolitical tensions and thus an increased demand for safe haven currencies, the U.S. dollar remains strong so far and many traders use dips as USD buying opportunities.

In the GBP/USD the psychological 1.20-level comes back into focus now and in case this support level is broken, we may see a free-fall towards 1.18.

Today, all eyes turn to European Central Bank policy statement due at 12:15 UTC and the first look at the U.S. Q3 GDP, scheduled for release at 12:30 UTC.

The ECB will keep rates on hold, so no big surprises are expected here but if U.S. GDP reveals a further economic expansion, the euro is vulnerable to further losses.

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Our trading ideas for today 26/10/23:

EUR/USD

Long @ 1.0570

Short @ 1.0525

 

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.

We wish you good trades!

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Geopolitical Tensions Lead To Risk-Aversion In The Market

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Dear Traders,

Yesterday’s U.S. inflation data and March FOMC minutes took a backseat to geopolitical tensions between the U.S. and Syria. U.S. President Trump warned Russia of incoming airstrikes on Syria for the Assad regime’s suspected use of chemical weapons. The prospect of U.S. military action against Syria have led to broad-based risk aversion in the market with Gold benefiting from its reputation as a safe-haven investment.

From a technical perspective there was nothing to gain for day traders in the Forex market with the U.S. CPI data and FOMC having only a limited impact on yesterday’s price action amidst the risk-off mode in the market.

As long as the risk of military conflict between Russia and the U.S. in Syria remains very high, we may see a lackluster price development in the market which provides little profitable trading opportunities.

Looking at the technical daily chart in both major currency pairs we see that near-term momentum is deep in overbought territory which is why we are looking for upcoming pullbacks.

EUR/USD: A drop below 1.2330 could open the door for accelerated bearish momentum towards 1.23 and 1.2250. However, given the overall uptrend buyers may swoop in at lower levels following a potential pullback. On the topside, the euro would need to take out the 1.24-hurdle to spark fresh bullish momentum towards 1.2430 and 1.2470.

Euro traders should keep an eye on the ECB minutes which are due for release today at 11:30 UTC.

GBP/USD: The pound refrained from stabilizing above 1.42 and dropped back towards 1.4160. We now expect a lower support zone to come in between 1.4120-1.4080. A current resistance is however seen at 1.4270.

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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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Sluggish Market Conditions Persist Amid Geopolitical Tensions

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Dear Traders,

Risk aversion and the liquidity drain ahead of the Easter holiday are hobbling the market. Tuesday’s best performer, however, was the British pound which soared to a high of 1.2494. The pound sterling benefited from a weakening U.S. dollar, which suffered some losses amid geopolitical tensions. The U.S.’s recent tougher stance created a new round of risk aversion in the market. However, the longer-term outlook for the dollar is still positive, including higher interest rates from the Fed while dollar bulls are likely to return to the market after the Easter break.

GBP/USD

The bullish movement has stalled near 1.25, a level that is considered a short-term resistance for the currency pair. The pound could possibly extend its gains to 1.2510/15 before we see a stronger correction. A break above 1.2525 however, could open the door for further bullish momentum, driving the cable towards the higher resistance zone around 1.2550/85. A current support is seen around 1.2430.

The U.K. Labor Market report is scheduled for release at 8:30 UTC and could have an impact on the price action. At the same time, Bank of England Governor Carney will speak at an event in London.

EUR/USD

The euro rose to a weekly high of 1.0630 but the currency pair’s price action is still confined to a narrow trading range. For breakout traders there was nothing to gain amid this subdued price development. The situation could persist until the French presidential election on April 23 as investors remain cautious ahead of that trend-setting event. For the time being we expect the euro’s price development to be limited to a range of 1.0650 and 1.0575.

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