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US Election: A Fateful Day?

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Dear Traders,

It’s Election Day in the U.S. and no other event matters financial markets more than this historical presidential election. The U.S. dollar slightly strengthened amid speculation that a Clinton win is more likely and therefore will pave the way for the Federal Reserve to raise interest rates next month.

Let’s briefly summarize the main points:

  • Final polls show a small but not insurmountable lead for Clinton
  • Results will start to come in after polls begin closing at 23:00 UTC (6 p.m. Eastern time)
  • Voting across the country will finish at 6:00 UTC (1 a.m. EST)
  • 4:00 UTC (11 p.m. EST) Earliest possible time to announce the winner.
  • Trump win would send the USD lower, at least initially. In the long-run, the dollar may strengthen on tax cuts and spending increases. The markets will face increased volatility and uncertainty. Risk-aversion will dominate.
  • Clinton win would send the USD higher as the focus shifts to Fed rate hike in December. Her victory could reinvigorate a fresh dollar rally while investors would become less risk-averse.
  • A tight race between Clinton and Trump would add uncertainty, which would be dollar-negative in the hours after the election.

As the price action will be determined by the latest polls, traders should prepare for both scenarios. In case of a Trump win, both of our major currency pairs will trade higher. Thus the euro could rise towards 1.12-1.1250 and even towards 1.14. The British pound could rise towards 1.2670/1.27. In case of a Clinton win however, the euro could fall towards 1.08 whereas the British pound might drop back towards 1.21. Let’s be surprised.

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U.S. Payrolls To Take Back Seat To Election Uncertainty

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Dear Traders,

It is payrolls-day again but this time, U.S. employment data is however not the market’s main concern. Market participants are bracing for election volatility and severe turbulence with only few days to go before the Nov. 8 presidential election between Hillary Clinton and Donald Trump. Traders are adjusting dollar positions to avoid risks ahead of the historical U.S. vote. The market became more nervous since Clinton’s lead over Trump has shrunk in the past days while a Trump victory has not yet been priced in. The dollar recently weakened against its counterparts in the light of that increasing uncertainty about the outcome.

Economists are looking for U.S. nonfarm payrolls to climb by 175k last month whereas a healthy report would reinforce the assumption that the Federal Reserve will raise interest rates next month. If the report falls however short of expectations, the greenback could face another round of weakness. The payrolls report is scheduled for release at 12:30 UTC.

Technically, the euro finds itself in a current trading range between 1.1125 and 1.1050. Looking at the daily chart we see that the downward channel is still unbroken, which could predict upcoming bearish momentum in the EUR/USD. As long as the euro remains below 1.1150 we see a higher likelihood for a downward movement.

chart_eur_usd_daily_snapshot4-11-16

However, we do not expect today’s NFP report to change the sentiment in the euro as big market players remain risk-averse ahead of next Tuesday/Wednesday – and that’s what we are doing.

The GBP/USD broke above the falling trend line of its recent downward channel and further gains might be possible but let’s be surprised and prepare for both bullish and bearish scenario. A new support could be at 1.2340 whereas a next major resistance is only seen around 1.2670.

chart_gbp_usd_4hours_snapshot4-11-16

Have a nice 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.

www.maimar.co

 

 

 

Focus Shifts From U.S. Dollar Rally To Non-U.S. Event Risks

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Dear Traders,

We welcome you to a new trading week. While the last week ended with broad based U.S. dollar strength, the greenback could be pushed into the background this week given major event risks such as the European Central Bank meeting on Thursday as well as important economic reports from China and U.K.

Market participants will be closely watching U.K. inflation data on Tuesday. Consumer Price Inflation is forecast to accelerate in September given the fact that sterling’s recent drop boosts inflation. We saw the pound tumbling towards 1.2150 where it found some support for the time being. We anticipate some upward movements towards 1.2225/50 ahead of tomorrow’s report, whereas a break below 1.2130 may boost bearish momentum towards 1.21 and 1.2090.

Euro traders are eagerly awaiting the ECB’s policy decision and the announcement from ECB President Mario Draghi. The market was rocked earlier this month by a report that the central bank could start to taper its bond-buying program of 80 billion euros a month. Draghi could therefore attempt to calm the market by emphasizing that the stimulus would continue. The euro fell below 1.10 and tested the 1.0970-support level on the back of a strong dollar. Whether the EUR/USD could be vulnerable to further losses may hinge on the ECB announcement. If Draghi announces changes to the QE program the euro will react accordingly. For the time being, we consider the 1.0970-50 price area as a support for the pair. On the topside we see a current resistance at 1.1150.

From the U.S. we will have less market moving data this week with the CPI report (Tuesday) being the only interesting piece of economic data. Politically, U.S. presidential candidates Hillary Clinton and Donald Trump will hold their final debate on Wednesday. 

Today, Eurozone Consumer Prices are scheduled for release at 9:00 UTC but this report is not expected to have a major impact on the euro. Furthermore, U.S. Industrial Production figures are due at 13:15 UTC.

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

 

 

 

U.S. Presidential Debate In Full Swing But Investors Remain Risk-Averse

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Dear Traders,

This week started with some volatile swings in the Forex market with GBP/USD being the most volatile currency pair on Monday. The British pound dropped again towards its current support at 1.2910 before it started a relief rally. The cable has been torn between the rising fears of a “hard Brexit” and the weakening dollar.  The euro, however, rebounded against the U.S. dollar and the pair tested its resistance zone around 1.1275/85. As stated in yesterday’s analysis euro bulls should better wait for prices above 1.13 and even better above 1.1350. As long as the euro remains below 1.13, our focus shifts to a break of the 1.12-support.

The pound sterling traded volatile during the Asian session as the first U.S. presidential debate is in full swing. A Clinton win is seen as dollar-positive while a Trump victory would lead to chaos in the markets and has not yet been priced in. Investors remain risk-averse in the run-up to the presidential election in November and seek safe havens. Recent polls show a close head-to-head contest between the two candidates.

Apart from the U.S. debate and safe haven flows, U.S. Consumer Confidence, due at 14:00 UTC could have an impact on the greenback.

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/

Subscribe to our daily signal service https://www.maimar.co/signals/

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