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Will FOMC Statement Pose A Risk To Dollar Bulls?

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Dear Traders,

The biggest story Friday was the sharp rise in the GBP/USD. After hitting a fresh five-year low at 1.4079 on Thursday, the currency pair rallied towards 1.4365 despite Friday’s weaker-than expected retail sales report. The rise can be attributed to the result of profit-taking after the recent linear decline in the British pound. The cable now faces the 1.4250/30 support-area once again but as long as the pair remains trading above that zone we expect some possible upward swings which may occur in the near-term (see technical analysis below).

The most important piece of U.K. economic data will be Gross Domestic Product, scheduled for release on Thursday and if data disappoints to the downside, sterling could be vulnerable to further losses again. On Tuesday, Bank of England Governor Mark Carney appears in Parliament to speak on financial-stability risks and a major topic could be the U.K. referendum on its membership in the EU and a potential “Brexit“.

The EUR/USD trended slightly lower, moving around the 1.08 support level. For the time being, we anticipate the 1.0770-level to be the next support before a renewed downswing toward 1.0730/15. On the upper side, we see current resistance-levels at 1.0835 and 1.0860.

The most important piece of Eurozone data this week will be the German IFO report, due for release at 9:00 GMT today. If IFO numbers fall short of expectations, the euro could tumble toward lower targets. Furthermore, German Consumer Prices are scheduled for release on Thursday.

All eyes will be on the Federal Reserve’s monetary policy meeting on Wednesday. While the central bank is not expected to alter its monetary policy and there will be no press conference, the statement could fail to add further strength to the U.S. dollar. Rather, the risk for the USD is to the downside, in case the FOMC statement turns out to be more dovish, suggesting a rate hike in March is less likely.

Further important U.S. economic reports are due for release with Consumer Confidence (Tuesday), Durable Goods Orders (Thursday) and U.S. Gross Domestic Product (Friday).

GBP/USD

Looking at the 4-hour chart, we see that there could be some upside room after a break of 1.4365. A next bullish target could be at 1.4420/45 with a possible extension until 1.4470. However a current support-zone is seen at 1.4250/30 and if the cable falls again below that level, we expect bearish momentum to accelerate towards 1.4170 and 1.4130.

Chart_GBP_USD_4Hours_snapshot25.1.16

 

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Quiet Trading

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Dear Traders,

These are the very last days of the year and many institutional investors have already closed their books. Despite some important economic reports scheduled for release within the next 3 days, this shortened trading week is expected to be very quiet.

The most important reports coming from the U.S. will be Q3 Gross Domestic Product figures, Existing Home Sales due for release on Tuesday and Personal Income scheduled for release alongside Durable Goods Orders on Wednesday. Most of these reports are expected to show softer numbers, which may lead to a minor weakness in the U.S. dollar’s uptrend. However, going into 2016, monetary policy remains the dominant theme. With the Federal Reserve remaining on track for tighter monetary policy while other central banks are tending towards an accommodative policy stance, the dollar should receive attraction throughout 2016.

Sterling traders should keep an eye on the U.K. GDP numbers, due for release on Wednesday. If data will be in line with expectations, the impact on the currency pair will be limited.

Let’s have a look at the technical side:

EUR/USD

As previously noted, the 1.08-level remains important to pay close attention to. Prices formatted a head-shoulders pattern, predicting upcoming bearish momentum once the 1.08-mark is significantly breached to the downside. Lower targets could be at 1.0708 and 1.0640. We see an important support area at 1.0550. Below 1.0520, the currency pair could free-fall towards 1.0465 and 1.04. However, current resistances could be at 1.0930 and 1.10. With sustained prices above 1.10 we consider the head-shoulders pattern as void.

Chart_EUR_USD_4Hours_snapshot21.12.15

GBP/USD

Sterling is currently trading around the support line of its downward channel. A break below 1.4850 could reinvigorate fresh bearish potential, whereas a break above 1.4965 may drive the pair towards 1.50 and 1.5050.

Chart_GBP_USD_Daily_snapshot21.12.15

We wish traders profitable trades just before the Christmas holidays and recommend not to invest too much during these days and take profits at smaller targets.

Please note that we will take a Christmas break from December 23 until January 1. During this period we will not provide our signal service. We will be back on January 4.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2015 Maimar-FX.

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Upside breakouts

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Dear Traders,

With no market-moving data and U.S. markets being closed for the Labor Day yesterday, trading has been very tranquilly. While the euro continued to trade consolidated between 1.1175 and 1.1120 , the British Pound gained some ground above 1.52 and climbed towards the 1.53-mark. Early this morning sterling has surged significant above 1.53, facing a next hurdle at 1.5360.

Eurozone Gross Domestic Product reports are scheduled for release today at 9:00 GMT. If numbers deviate from expectations, we may see further volatile swings in the EUR/USD.

Relief Rally in the EUR/USD

Technically, prices formatted an ascending triangle early this morning, which favored upcoming bullish momentum with a break of 1.1180. It has already proved correct when the euro jumped above 1.12 in the early trading hours. We see a next resistance at around 1.1236.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2015 Maimar-FX.

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A profitable week is coming to an end

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Dear Traders,

The U.S. dollar extended its gains after data showed the U.S.economy grew more than forecast in the second quarter. The gross domestic product grew at a 3.7 percent rate, exceeding all expectations.

Short-traders have been very profitable for a third consecutive day and should now ensure that the weekly profit is not exposed to any risk. Therefore, you should consider doing either a trading break or trade with very small positions today.

The pound sterling dipped below 1.54 but managed to hold its ground and remained above the 1.54-mark towards the end of the day. U.K. Gross Domestic Product is scheduled for release at 8:30 GMT, a report which could trigger a major reaction in the GBP/USD if data is not in line with expectations.

Furthermore, we will keep an eye on German Consumer Prices, due for release at 12:00 GMT. From the USA, there will be second-tier data such as PCE numbers and Michigan Confidence, scheduled for release at 12:30 and 14:00 GMT.

It has been a profitable week, and that’s a good reason to lean back, relax and enjoy the 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 2015 Maimar-FX.

www.maimar.co