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Is China’s Devaluation good or bad for the U.S. Dollar?

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Dear Traders,

The euro rallied as Greece reached an initial agreement with creditors on the terms of a third bailout. Euro-bulls were able to gain a nice profit until the current resistance around 1.1080.

The U.S. dollar got no major support from China’s Yuan devaluation.

While China’s move to devalue the currency by 1.9 percent raises doubts on the health of the world’s second-largest economy and generally leads to safe-haven flows into the U.S. dollar, the currency move could also pose a challenge for the Federal Reserve. One of the major concerns for the Fed is a strong U.S. dollar, which is holding inflation low. In a currency environment of an easier money path where other central banks are going to ease monetary policy in order to boost exports, it could be hard for the Fed to justify an interest rate hike this year. This fueled speculation the Fed’s actions could be pushed into 2016. With this in mind, the U.S. dollar could be vulnerable to further weakness in the near-term.

The British Pound traded sideways, accompanied by a slight downward tendency. The U.K. labor market report is due for release today at 8:30 GMT. Average Weekly Earnings are forecast to show a decline which could pose further downward momentum for the pound sterling.

The only piece of eurozone data today will be Industrial Production scheduled for release at 9:00 GMT.

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Quiet Friday? Focus on Sunday

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Dear Traders,

There is not much news on the market. Economic developments in Greece and China pose a risk for the financial markets but at the moment, the tone is nevertheless optimistic.

Both of our major pairs ended the day more or less unchanged against the U.S. dollar. While the euro took a short dip below 1.10, it recovered its losses until the end of the day and remained comfortable near 1.11.

The pound sterling remained range-bound and traded between 1.5410 and 1.5345.

What’s important for today?

Not much. The only piece of economic data comes from the U.K. with Trade Balance reports due for release at 8:30 GMT.

The focus will be on the summit of European Union leaders Sunday. EU leaders will determine whether Greece gets a new bailout, or be forced to leave the single currency. With that in mind we may see the EUR/USD opening with a gap again on Monday morning. This time, if the decision is ‘yes’ for Greece, the euro might rally in relief.

EUR/USD

Technically, the sentiment looks more bullish. If the euro is able to trade significantly above 1.1130, it may head for another test of 1.12 and further 1.13. However, below 1.0980 the euro could be vulnerable for further losses.

Chart_EUR_USD_4Hours_snapshot10.7.15

We wish everyone a beautiful weekend and a nice Friday.

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Copyright © All Rights Reserved 2015 Maimar-FX.

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FOMC Meeting Minutes

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Dear Traders,

Only yesterday we were talking about difficult market conditions without sustained consistency but finally there has been some momentum, providing traders profitable chances in both major pairs.

The GBP/USD was the best performer yesterday, falling more than 150 pips from our short-entry. A next target for sterling bears could be at 1.5320, from where the British Pound may bounce off. Above 1.5550 we would favor a bullish stance again.

The EUR/USD should still be treated with caution. While the euro declined against the U.S. dollar and surprisingly showed a linear movement to the downside, the currency pair remains vulnerable for spiky moves. Greece promised new reform proposals but Europe’s leaders warned Tsipras that only a few days are left to reach a deal. Greece has now five days to commit to its reforms and accept the terms of the Eurozone’s financial support or face ejection of the euro region.

Euro-zone fiance ministers will hold a conference call today to weigh Greece’s new aid request. If the loan from the European Stability Mechanism (ESM) is granted, it would give the nation some breathing space.

FOMC Minutes of secondary importance today?

The Federal Reserve releases minutes of the last FOMC meeting at 18:00 GMT. No surprises are expected as Fed chair Janet Yellen failed to provide a clear timeline for a rate hike at her last press conference. Chances are that minutes are more hawkish, but given the recent turmoil in the financial markets, the Fed’s view may have changed since the last meeting. The impact on the dollar could therefore be muted today. Let’s wait and see.

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Crucial Week

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Dear Traders,

We welcome you to a new trading week which promises to be a week of fireworks. After the breakdown of Greek aid talks, markets will now have to deal with the possible effects for the eurozone. Currently it seems as if the optimists on a Greek debt deal were wrong after the weekend developments marked an abrupt turn from last week’s hopes. Greek Prime Minister Alexis Tsipras shocked his counterparts with his call for a July 5 referendum on the austerity demanded by creditors, just a few days before the current bailout expires on Tuesday.

Greece declared a bank holiday until at least the national referendum and imposed capital controls to avert a financial collapse. Dark clouds may be looming on the financial sky, so traders should be prepared for strong market fluctuations this week.

The market will first focus on Greece and its IMF payment which is due on Tuesday. The rest of the week will focus on economic data, such as Eurozone Consumer Prices (Tuesday), ISM Manufacturing (Wednesday) and U.S. Non-Farm Payrolls due for release on Thursday. U.S. markets will remain closed on Friday for the Independence Day holiday.

EUR/USD

Based on the recent upward channel, the euro has still failed to break significantly to the downside. As long as the currency pair trades comfortable above 1.09, we do not see a technical stimuli for an aggressive sell-off. Once it breaks significantly below 1.09 we see greater chances for a drop towards 1.0810 and further 1.0720. A next key support zone could be at 1.0720-1.0660. However, if the support line proved able to withstand the pressure we see a current resistance area at around 1.1050. Above 1.1080 our focus will shift to the 1.12-level.

Chart_EUR_USD_Daily_snapshot29.6.15

Important economic data for today:

8:30 UK Net Consumer Credit & Mortgage Approvals

9:00 EUR Economic Confidence

12:00 EUR German Consumer Price Index

14:00 USA Pending Home Sales

We wish you many good trades and a profitable week.

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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

 

 

Solution for Greece today?

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Dear Traders,

The U.S. dollar recovered on an overall positive dollar sentiment. Hawkish comments from FOMC member Powell saying that a first rate hike could come as soon as September, with a second move to follow in December, led further support to the greenback. The market is now shifting again its focus more towards the Fed and a liftoff in September, preferring to be long U.S. dollars rather than euros.

The euro remained weak even as optimism grows that Greece will avert default. Despite the the fact that a deal appeared within reach, a main reason for the decline in the euro is, that the currency became attractive as a funding currency. Eurozone finance ministers will meet again today to try to reach a final agreement to unlock aid.

The pound sterling slid below 1.58 and found a current support slightly above the 1.57-level. The up-trend is still intact. A break above 1.5835 could revive sterling’s strength whereas a significant break below 1.57 could drive the pair towards 1.5630.

The German Ifo Business Climate which is due for release today at 8:00 GMT and later the final Q1 U.S. GDP reading scheduled for release at 12:30 GMT, could be important reports to watch.

Euro-area finance minister’s talks will start today at 7 p.m. in Brussels.

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

 

 

EU Emergency Summit: Tough Monday?

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Dear Traders,

Last Friday turned out to be a quite uneventful trading day with both major pairs initially tending downwards but ending the day unchanged against the U.S. dollar.

The euro was supported by 1.13 ahead of today’s EU emergency summit in Brussels. The market is still expecting that in the eleventh hour an agreement between Greece and its creditors will be reached. The euro therefore trades on hopes and optimism about a defining solution. However, we should not underestimate the risk if Greece fails to pay the IMF the 1.5 billion euros which is due on June 30. The outcome of the Greek debt talks will determine how the euro trades the next days. The emergency summit starts at 12:30 local time in Brussels. If no agreement is made today, the next key event risk is the special summit planned for June 25-26.

Asides from Greek debt negotiations, there is a number of U.S. economic reports this week. The most important piece of data will be Durable Goods orders (Tuesday) and the revision to Q1 GDP (Wednesday).

The British Pound knows only one direction: Upwards. The GBP/USD rallied now 10 days without any major pullback. A next resistance is at 1.60 and further 1.6150. Below 1.5835 sterling may correct its recent gains down to 1.5750. There are no major U.K. economic reports scheduled for release this week so traders should focus on the demand for U.S. dollars.

Economic data today:

10:30 EUR Eurogroup Emergency Summit

14:00 USA Existing Home Sales

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

 

 

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 2015 Maimar-FX.

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