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Dutch Election Cast Shadows Over EU-Future

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Dear Traders,

Financial markets got off to a relatively quiet start on Monday as investors remained risk-averse ahead of major risk events on Wednesday.

The euro surged briefly to a high of 1.0714 before it started giving up some of its gains. Meanwhile, the outcome of the Dutch election threatens to cast more doubts over the future of the European Union. With only one day to go until the Dutch election on March 15, the euro came slightly under pressure. A victory of the right-wing Populist Party PVV (Party for Freedom) could mean further euro losses. Euro-skeptic Geert Wilders heads up the populist Party of Freedom, which has gathered momentum on growing nationalist and anti-Islamic sentiment.

Traders should pay attention to a renewed break below 1.06 which could possibly send the euro tumbling towards 1.0490. On the upside, the 1.08-level remains in focus.

Today, the only interesting piece of economic data will be the German ZEW Survey, due for release at 10:00 UTC.

The British pound initially strengthened against the U.S. dollar but it was unable to overcome the resistance-level at 1.2250. The U.K. Parliament on Monday passed legislation allowing the government to invoke Article 50, which means the formal start of Brexit. Prime Minister Theresa May plans to trigger Brexit in the last week of March. Thus, the pound could be vulnerable to further losses in anticipation of the possible effects of a Brexit. An important support is seen at 1.21 and the cable will need to break below 1.2080 in order to spark fresh bearish momentum.

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Yellen Testimony Takes Center Stage

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Dear Traders,

The currency market got off to a cautious start before the testimony from Federal Reserve’s Janet Yellen. The U.S. dollar was little changed against the euro and British pound Monday and while the euro took a dip below the 1.06-level, we still cannot speak of a significant downside breakout. The pound sterling ended the trading day in positive territory and it currently appears poised to break through the 1.2550-barrier. For sterling traders, it will be an interesting trading day with U.K. Consumer Prices being due for release at 9:30 UTC. Traders should prepare for volatile swings even ahead of the upcoming inflation figures. Above 1.2560 the pound may head for a test of 1.2575/95. While the risk for inflation is clearly on the upside there is also potential for disappointment last month.

The euro is hovering around the 1.06-mark and we still wait for a sustained break below the 1.0580-support. Once that level is breached we expect further losses towards 1.0550 and 1.0520. On the upside, the 1.0650-level may limit potential gains but today’s price action will hinge on Yellen’s testimony. Euro traders will also pay attention to the German ZEW Survey and Eurozone GDP figures, both reports scheduled for release at 10:00 UTC.

The Fed chair will start testimony in Congress in Washington at 15:00 UTC. While Yellen is not expected to give any clear hints as to the timing of the next rate hike, her comments on monetary policy could trigger larger market moves.

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All Eyes On May’s Speech

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Dear Traders,

Those who traded yesterday’s consolidation in the GBP/USD had to struggle with volatile but choppy price swings, generating only losses ahead of today’s key event risk. Sterling traders are in the starting blocks for high volatility when U.K. Prime Minister Theresa May is scheduled to give a speech on the Brexit approach and we hope for more profitable trading opportunities today. May’s speech will be closely watched as it is designed to set out the government’s position and goals over the upcoming Brexit negotiations. Traders will look for any hints as to whether the U.K. will pursue a ‘hard’ or ‘soft’ Brexit. The market is currently pricing in a higher likelihood of a hard Brexit approach with the U.K. being likely to pull out of the European Union’s single market for goods and services. May will use her speech to explicitly say she expects the U.K. to leave the single market (hard Brexit), according to a person familiar with the matter. Given the fact that May is expected to be aiming for full separation from the EU, we expect the pound to remain under pressure. Pullbacks may therefore be an attractive opportunity to sell the pound at higher levels. However, we bear in mind that when market’s expectations are very high, there is a greater potential for disappointment and thus there is also a small chance of a short squeeze in the pound. In short, anything can happen today and we recommend traders to prepare for both bullish and bearish scenario even if the risk is to the downside.

PM May’s speech is scheduled for 11:45 UTC.

Until this morning, the pound traded sideways between 1.2085 and 1.1985 and the focus has therefore shifted to breakouts above or below this range. Bearing in mind that Monday’s gap was not yet closed, the pound might tend to test the 1.2170 area before falling back towards 1.1965. A significant break above 1.22 however, could send the pound toward 1.23. On the downside, the 1.1960-level needs to be broken in order to reinvigorate fresh bearish momentum.

Before May’s important speech we have the U.K. Consumer Price report scheduled for release at 9:30 UTC. Analysts are looking for an uptick in inflation while this report alone could help the pound strengthening in short-term time frames. With inflation being on the rise, the Bank of England could intend to raise interest rates in a next move, unless Brexit developments undermine the economy.

Trading in the EUR/USD was very quiet and none of our yesterday’s entries was triggered. Today, euro traders will watch the German ZEW Survey at 10:00 UTC, which could have a impact on the euro. The 1.0685-resistance area remains in focus and if the single currency climbs above that level we may see an extended upward move toward 1.07/1.0715.

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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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Further Gains In The British Pound? Focus On CPI Data

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Dear Traders,

The euro ended the day unchanged against the U.S. dollar after it fluctuated considerably on Federal Reserve Governor Lael Brainard’s comments. She remained dovish and urged “prudence” in her approach to tighter monetary policy, even as she acknowledged that the U.S. economy is moving toward achieving the Fed’s goals of maximum employment and 2 percent inflation. Traders had to struggle with unsteady price movements in the EUR/USD, leading to losses instead of profits. The most important piece of economic data from the eurozone will be the German and Eurozone ZEW Survey, due to be released at 9:00 UTC. We hope for a breakout of the euro’s recent trading range, sending the pair towards 1.1315 on the upside or 1.1170 on the downside.

Unlike the euro, the British pound trended upwards and provided a good gain with both of our long-entries. Thus our swing long-entry at 1.3240 already proved to be highly profitable.

The U.K. Consumer Price report is scheduled for release at 8:30 UTC and should have a significant impact on the pound. Chances are that sterling extends its gains towards 1.3375 and even 1.3440. A break below 1.3250 however could shift the bias from bullish to bearish.

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

 

 

 

Brexit Polls Show Neck-And-Neck Race, Will GBP Maintain Its High Price Level?

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Dear Traders,

The British pound is exposed to extremely volatile trading conditions in the run-up to the U.K. referendum. Separate polls are showing leads for both sides, creating uncertainty among speculators. The most recent survey showed ‘Leave’ at 44 percent and 42 percent for ‘Remain’, while a different poll saw ‘Remain’ at 53 percent and ‘Leave’ at 46 percent. The British pound rose to a high of 1.4721 on increased risk appetite but, as noted in yesterday’s analysis, it still fluctuates within its range with the annual high at 1.4816. An upside break above 1.4730 may drive the pound towards its May high at 1.4770, while a downside break below 1.4580 could lead to a downswing towards 1.4520 and 1.4470.

U.K. Public Finances are due for release at 8:30 UTC, but Brexit headlines will continue to dominate the price action in the pound.

The euro was slightly tilted to the downside but for the time being, the 1.13-support proved to be intact. Hence, short traders’ efforts didn’t pay off as the downswing was limited. On the upper side, we will now focus on a renewed break above 1.1360 in order to buy euros towards 1.14 and 1.1440. Below 1.1280, we expect bearish momentum to increase, driving the euro towards 1.1230 and 1.12 in a next step.

Fed Chair Yellen is scheduled to testify before lawmakers in a semiannual report today at 14:00 UTC. Yellen is unlikely to provide new insights into the timing of future interest rates but she may stress the risks of a potential Brexit which would harm the U.S. economy. The U.S. dollar might be vulnerable to some losses if she sounds less hawkish.

From the Eurozone, we have the German ZEW Survey scheduled for release at 9:00 UTC, a report that could have a short-term impact on the euro. However, price fluctuation in the EUR/USD will be dominated by the level of risk-appetite for euros and dollars, while economic data will take a backseat with only two days before the Brexit vote.

Before Yellen’s testimony, ECB President Mario Draghi speaks in Brussels at 13:00 UTC.

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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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Bullish Bias As Risk-Appetite Increases

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Dear Traders,

Yesterday’s best performer was the British pound, which rallied towards 1.43 as investors shrugged off oil’s losses and Chancellor Osborne’s warning of “permanent” damage should U.K. vote to leave the European Union. While we continue to favor a bearish stance in the GBP/USD, extensions of the recent upward movement might be possible until 1.4380 and 1.4430. Once the pair breaks above 1.4330 a next crucial resistance zone could be at 1.4370-95, from where reversals are becoming more likely. On the bottom side, we expect the 1.4250-level to lend a short-term support to the currency pair. However, if GBP falls back below 1.4225, a lower target could be at 1.4160.

Bank of England Governor Mark Carney will give evidence to the House of Lords Economic Affairs Committee today at 14:30 GMT. This event is likely to be this week’s fundamental highlight for the pound sterling and could affect the currency accordingly. If he favors a pro-EU stance, it should be supportive for the pound.

The euro did not show much movement Monday and traded within a narrow 60-pips trading range. None of our entries was triggered but euro traders hope for major movements today before the German and Eurozone ZEW Surveys are scheduled for release. In case of a major improvement, the euro could head for a test of 1.1350. Here we see a crucial resistance level, which could cap on gains in the EUR/USD. The common currency would need to break significantly above 1.1365 in order to revive bullish strength towards 1.14. On the downside, we will focus on a break below 1.13 in order to sell the euro towards lower targets at 1.1275 and 1.1250.

Important events and economic reports:

9:00 EUR ZEW Surveys

12:30 USA Housing Starts and Building Permits

14:30 UK Carney’s Testimony

(Time zone GMT)

Daily Forex signals:

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Low Volatility Fails To Provide Profitable Environment For Traders

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Dear Traders,

There was little movement in the finical markets with the euro and British pound being uninfluenced by any hawkish Fed speak and U.S. economic data. Despite hawkish comments from Atlanta Fed President Dennis Lockhart and San Francisco President John Williams saying that recent economic data may justify additional policy tightening there was no appetite for U.S. dollars. Neither did weaker U.S. existing home sales numbers affect the greenback negatively.

Volatility has been very high during the last two weeks and many investors and day traders have locked up a good profit which is why many investors prematurely went on vacation or now refrain from taking any positions ahead of the Easter holidays. This week we expect volatility to remain moderate with traded volumes being subdued. Traders should therefore not expect too much and take profits at smaller targets.

The EUR/USD refrained from trading below the 1.1230-level but does not seem to favor the upward trend, either. A current resistance is seen at 1.1285, whereas short-traders should pay close attention to a break of the 1.1220-1.12 support. The German IFO and ZEW surveys are due for release today and forecasts point to an increased confidence. Positive numbers may lend support to the euro’s bullish bias.

Trading the GBP/USD yesterday has offered us nothing but losses. The cable marked a recent support at around 1.4360 whereas upward movements were limited until 1.4430. We see next important support levels at 1.4335 and 1.4310 which have to be breached in order to reinvigorate fresh bearish momentum. U.K. Consumer Prices are due for release at 9:30 GMT and if data provides a positive surprise we could see sterling strengthening towards 1.4450 and 1.45.

9:00 EUR German IFO Business Climate

9:30 UK Consumer Prices

10:00 EUR German ZEW Survey

13:45 USA Markit Manufacturing PMI 

(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.

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Cable Remains Trading Sideways – Focus On CPI

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Dear Traders,

The euro dropped below 1.1160 as ECB President Mario Draghi confirmed the central bank’s easing bias. The ECB stands ready to act in the light of recent financial turmoil and would pay close attention to the impact of renewed declines in energy prices as well as the ability of banks to transpose the ECB’s monetary policy. Draghi said “if either of these two factors entail downward risks to price stability, we will not hesitate to act”. His remarks to the European parliament indicate that the central bank could unveil further stimulus at their next ECB meeting in March. The EUR/USD traded lower in response to Draghi’s statement.

Furthermore, the OMT bond buying program returns to the headlines. The Federal Constitutional Court holds again a hearing in a lawsuit against the European Central Bank’s Outright Monetary Transactions program (OMT), a never-used bond buying program announced in 2012. If Germany’s top judges decide that the ECB is overstepping its mandate, they could restrict the central bank’s options.

The Eurozone ZEW Survey is scheduled for release at 10:00 GMT along with German ZEW Index and if figures are even lower than the expectations, the euro could accelerate its decline.

The British pound traded lower on Monday but still remained within its current trading range. U.K. Consumer prices are due for release today at 9:30 GMT and may help to determine a clear direction and increase the momentum. A sustained break below 1.4350 could drive the cable towards 1.4290, whereas a break above 1.4540 may invigorate renewed bullish momentum.

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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GBP/USD: Bottom At 1.4235? GBP Awaits CPI And Carney’s Comments

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Dear Traders,

The performance of the British pound was hampered by a short-lived upside correction, which was more limited than we had previously expected. While we anticipated the short pullback to last until at least 1.4335, the pound sterling reversed shy of 1.4325.  The currency pair is now facing its support at 1.4230 and if we see a break below that level, GBP could slide towards next lower targets at 1.42, 1.4150 and 1.4110. Short-term resistances are seen at 1.4310/25 and 1.4350.

Sterling traders will pay attention to the U.K. Consumer Price report, scheduled for release at 9:30 GMT today. While the Core CPI is forecast to hold steady, inflation data from December may show an uptick. Whatever the case, any changes in CPI could have a strong impact on the currency. Furthermore, Bank of England Governor Mark Carney is scheduled to speak on the economy at 12:00 GMT. If he sounds more dovish, GBP could extend its losses versus the U.S. dollar.

The EUR/USD traded sideways within a narrow trading range. With prices above 1.0910 the euro may head for another test of 1.0945 and further 1.0975. On the bottom side we see a current support-area ranging from 1.0870 until 1.0845. The currency pair will first need to break this area significantly in order to test next important price levels at 1.0834 and 1.0810.

The most important piece of economic data from the Eurozone will be the German ZEW Survey due at 10:00 GMT alongside the Eurozone Consumer Price Report. In case of any disappointments, the euro could be trending downwards.

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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Will U.S. Consumer Prices Spur Dollar Bulls?

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Dear Traders,

The U.S. dollar weakened against the euro on speculation the greenback could be vulnerable to a post-Fed selloff. Investors are either taking profits before year-end or adjusting their positions ahead of the big event tomorrow. The Fed is widely expected to increase its benchmark but the focus will be on the overall monetary policy path following a first hike. The British Pound, however, was forced to test its 1.5110-support before it followed the current upward trend.

Today’s focus will be on Consumer Price Reports from the U.S.and U.K. As recently noticed, the market only shows a strong reaction when reports are falling short of expectations. We will therefore be looking for any surprises in CPI figures. Moreover, the German and Eurozone ZEW Survey is scheduled for release at 10:00 GMT.

9:30 UK CPI

10:00 EUR German & Eurozone ZEW Index

13:30 USA CPI

Here is where we see short-term resistances and supports:

  Resistances Supports
EUR/USD 1.1040

1.1060

1.11

 

 1.0965

1.0935

1.09

 
  Resistances Supports
GBP/USD 1.5187

1.52

1.5260

 1.5110

1.5075

1.5045

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