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U.S. Dollar Strengthened Modestly On Yellen Comments

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Treasury Secretary and former Federal Reserve Chair Janet Yellen said interest rates may have to rise modestly to prevent the U.S. economy from overheating due to higher levels of government spending. While Yellen said in a later interview that she wasn’t predicting or recommending rate hikes, her comments raised concerns that Fed policy makers may move to tighten sooner than the market expects. The U.S. dollar strengthened modestly against other peers but important support levels such as 1.20 in the EUR/USD and 1.38 in the GBP/USD still remain unbroken.

EUR/USD: If the euro falls below 1.1970, it could extend its slide towards 1.1920 and 1.1880. On the topside, a break above 1.2070 could spur bullish momentum towards 1.2150.

GBP/USD: Prices were little changed ahead of tomorrow’s key events. We expect the cable to trade between 1.40 and 1.3790 today.

DAX: The index broke below 15000 and extended its slide towards 14800 – the ascending trendline of the DAX’s overall uptrend channel. As long as the index holds above 14800, we anticipate a rebound towards 15200.

On the economic docket, U.S. ADP employment change is due today at 12:15 UTC which could have an impact on USD crosses.

We wish you good trades!

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Focus on Yellen’s Testimony

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Dear traders,

The U.S. dollar retreated ahead of U.S. Treasury Secretary-designate Janet Yellen Senate confirmation hearing later today. Yellen is expected to affirm the U.S.’s commitment to a market-determined dollar value and her comments may serve as a fresh catalyst for the greenback, giving the green light for the dollar’s long-term downtrend.

EUR/USD: The euro found a halt at 1.2050 from where prices reversed. As written in our analysis from Monday we now see a next resistance at around 1.2150.

GBP/USD: The pound broke below 1.3530 but the downward move was not sustained as the greenback’s momentum ebbed. This morning we see the cable again above 1.36 and pencil in potential further gains towards 1.3640.

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EUR/USD

Long @ 1.2120

Short @ 1.2035

GBP/USD

Long @ 1.3630

Short @ 1.3565

DAX® (GER30)

Long @ 13980

Short @ 13870

 

Results 2020:

December 2020: +318 pips

November 2020: +75 pips

October 2020: +432 pips

 

We wish you good trades!

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Will Yellen’s Final Move Depreciate The USD?

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Dear Traders,

It’s decision day at the Federal Reserve and what makes this final policy decision of the year a significant meeting is not the anticipated rate hike, but the monetary policy outlook for 2018. While the market is certain of a third 2017 hike, the focus will turn to forecasts for the pacing through 2018. We will therefore keep an eye on the dot-plot in order to shape expectations for next year’s rate hike path. If the Summary of Economic Projections (SEP) projects another three or possibly even four rate hikes ahead, the dollar will further rally. However, it is very unlikely that the Fed surprises the market and accelerates its pace. Hence, there is a risk of disappointment today, which could lead to a sell-off in the dollar. We recommend preparing for heightened volatility during the entire North American trading session, while most price action will take place around the FOMC decision and press conference, as well as the CPI reading that will be due before the rate decision.

For Fed Chair Janet Yellen it will be her final quarterly press conference before she steps down in February. It is therefore unlikely that she will signal any new prospects on the Fed’s guidance.

13:30 USD Consumer Price Index (CPI)

19:00 USD FOMC Rate Decision

19:30 USD Yellen Holds Press Conference

(Time zone UTC)

Yesterday’s price performance in both EUR/USD and GBP/USD was not to our liking as both currency pairs failed to pick a clear direction despite the broad-based strength in the USD. Technically speaking, the picture has not changed.

GBP/USD: The cable refrained from a break below 1.33 and we currently focus on a price range between 1.3450 and 1.3220. Yesterday’s better-than-expected U.K. inflation data failed to lift up the currency but if investors take profit on dollar positions today, we could finally see some corrective movements driving the pair higher before the holiday liquidity drain.  

EUR/USD: The euro remained well above 1.17 and as long as there is no clear break below 1.1680 the euro could head for another test of 1.1790. Below 1.1680 we focus on lower targets at 1.1640 and 1.16.

We wish you good trades for today.

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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.

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EUR/USD Remains Below 1.18, GBP/USD Faces 1.33

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Dear Traders,

The euro ended the trading day virtually unchanged against the U.S. dollar after a bullish reversal towards 1.18 has proved short-lived. We now expect the EUR/USD to trade lower towards 1.1680 unless we see a sustained break above 1.18 and farther 1.1840, which would shift the bias in favor of the bulls.

The GBP/USD followed its short-term upward trend channel (see yesterday’s analysis) and rose to a high of 1.3280. If the cable is able to hold above 1.32 we expect further gains towards 1.3310 and possibly even 1.3325. But irrespective of the technical outlook, any new Brexit headlines or speculation about the Brexit progress will affect the cable’s price action in the near-term.

Sterling traders should keep an eye on the Bank of England testimony at 10:00 UTC. Several BoE officials are scheduled to testify before Parliament and if there are indications of further monetary policy normalization in 2018, the pound could soar.

Federal Reserve Chair Janet Yellen is scheduled to speak later today at 23:00 UTC but her comments may have little impact on the greenback’s price action as she announced her retirement from the Fed in February after Jerome Powell has been sworn into office.

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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.

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EUR/USD And GBP/USD Bounce Off Resistance Levels; USD Stronger

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Dear Traders,

Positive developments in Washington and hopes that the U.S. tax reform bill could pass the House have been supportive for the U.S. dollar. The greenback advanced against the euro and British pound, driving both EUR/USD and GBP/USD towards important support levels. The U.S. Senate adopted a fiscal 2018 budget resolution on Thursday that House GOP leaders agreed to accept.

On the flipside, the euro received no support from political developments in Spain. Madrid is finalizing plans to take control of Catalonia and to suspend the region’s autonomy. This step should keep the political situation in Spain tense.

The pound fell on disappointing U.K. data and speculation that the upcoming Bank of England rate hike could be a one-off. The BoE is forecast to hike rates on their next monetary policy meeting on November 2 but analysts doubt that there could be more than one rate increase in the medium-term. For the time being, we expect the pound to trade with volatile swings between 1.3250 and 1.30. As mentioned in yesterday’s analysis, for bearish momentum to accelerate the pound will have to break the 1.31-support significantly.

EUR/USD: As expected, the resistance level at 1.1850/60 has proved correct and the euro tested this barrier before reversing some of its gains. We now expect the pair to trade lower and focus on targets at 1.1770 and 1.17.

There are no major economic reports scheduled for release today. Fed Chair Janet Yellen is scheduled to hold a speech today but since this speech is only due after markets close, it will not affect the price action.

We wish you good trades and 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 2017 Maimar-FX.

www.maimar.co

 

U.S. Dollar Weakness Ahead? ADP And ISM Reports In Focus

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Dear Traders,

Trading was relatively quiet Tuesday with the U.S. dollar’s latest recovery losing some momentum. After crucial support zones in the EUR/USD and GBP/USD have been tested, it seems that the euro and pound could find a bottom in the near-term.

EUR/USD: The euro strengthened against the greenback after dipping slightly below 1.17. With the 1.17-support still unbroken, our focus now turns to the 1.1820/30-resistance level which could limit gains in short-term time frames.

GBP/USD: The cable was able to stabilize above 1.3235 and we now anticipate some pullback towards 1.3340/50. For the bias to shift from bearish to bullish it would need a sustained break above 1.3460. A lower support is however seen at 1.3180.

How the dollar will trade within the next two days will mainly depend on the U.S. employment data. Today we have the ADP private payrolls (12:15 UTC) and the ISM service sector activity report (14:00 UTC) scheduled for release. Traders should pay close attention to these reports as they could determine how the USD will trade ahead of the U.S. payrolls report on Friday. Furthermore, we have another speech from Fed Chair Janet Yellen at 19:15 UTC.

Sterling traders may also keep an eye on the U.K. PMI report due for release at 8:30 UTC.

After yesterday’s quiet trading we expect higher volatility today and wish you good trades.

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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

 

Wild Wednesday: Anything Is Possible, Even A Disappointment Despite Fed Tightening

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Dear Traders,

It’s Fed-decision day and the waiting finally comes to an end. After several days of range-bound conditions and low volatility, traders now prepare for volatile swings and trend-setting movements. The probability of a Federal Reserve rate hike is completely priced in while the U.S. dollar shrugged off the bullish bias. The greenback’s reluctance to commit to further tightening suggests that dollar bulls might be unimpressed by the FOMC policy announcement.

The Fed’s monetary policy decision will be announced at 18:00 UTC but the impact on the dollar could be muted as traders appear to be well prepared for a March rate hike. The spotlight however, will be on the following press conference with Fed Chair Janet Yellen and revised rate path projections. Economists expect the path for rates to include three hikes this year and in case of a steeper tightening path, the dollar will rally. However, there is a greater potential for disappointment and if Yellen sounds more balanced, preferring a wait-and-see mode, the dollar will be vulnerable to losses.

All eyes will be on the FOMC announcement but before that major risk event, traders should also pay attention to U.S. Consumer Prices, scheduled for release at 12:30 UTC.

Apart from the Fed decision, elections in the Netherlands will draw the focus back on the euro’s resilience. The Dutch vote is the biggest test of the strength and resilience of the populist surge this year. The euro could therefore tend to fluctuate sharply towards the end of the American trading session.

EUR/USD

From a technical perspective, we expect bearish momentum to accelerate if the euro falls below 1.0570. Lower targets could then be at 1.05 and 1.0380. A short-term resistance is however seen at around 1.0650. If the euro significantly breaks through that resistance-level we may see further gains towards 1.07 and 1.0790.

 

GBP/USD

Today’s short squeeze in the British pound was an impressive reminder that there is still potential for exaggerated movements. The pound surged to a high of 1.2257, which is considered a current resistance-zone in the cable. Above 1.2260 we may see further gains toward 1.23 but everything is possible today and the price action will also hinge on the appetite for USD. We generally anticipate the cable to remain within a range between 1.24 and 1.21 for the time being. On the bottom side, the pound will need to break below 1.2080 in order to invigorate fresh bearish momentum.

The U.K. employment report is due for release at 9:30 UTC and could have a minor impact on the pound.

 

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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

 

 

U.S. Dollar Remains Bid, Fed Speak Reaffirms Rate Hike Expectations

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Dear Traders,

Apart from a loss-making cable, there was not much going on in the markets on Thursday. Dollar bulls remained active, sending the greenback higher against its major counter parts but trading the GBP/USD has proved unsuccessful. The pound sterling refrained from trading any lower than 1.2240 and tagged a fresh support at 1.2258. We will now wait for a sustained break below 1.2230, possibly pushing the pound for a test of 1.22. On the upside we expect a short-term resistance at 1.2330/50.  The U.K. Services PMI report is scheduled for release at 9:30 UTC, but this report is not expected to have a major impact on the pound.

The EUR/USD traded slightly lower, dipping below 1.05. For the euro to fall towards lower targets the pair will need to break below 1.0485. As long as the euro remains firmly above 1.05 we could see some pullback towards 1.0540/50.

Market participants will listen to Fed speak from Janet Yellen who is expected to reaffirm the case for tightening at the next FOMC meeting in two weeks. Yellen gives an address on the economic outlook in Chicago today at 18:00 UTC.

The ISM Non-Manufacturing index is scheduled for release at 15:00 UTC and could also have a minor impact on the greenback.

We generally expect further dollar strength in the coming days, even though we may see some corrective movements in both major currency pairs.

Have a good weekend.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

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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

 

 

 

U.S. Dollars Recovers On Hawkish Fed Rhetoric

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Dear Traders,

The U.S. dollar regained some strength following a slew of hawkish Fed rhetoric. Federal Reserve Chair Janet Yellen reiterated in a town hall meeting that the U.S. economy is doing quite well. She was optimistic on the labor market and inflation and wage growth, saying that inflation is close to the Fed’s 2 percent goal.

These hawkish remarks helped the greenback to recover from its recent lows. The euro peaked at 1.0684 before falling back toward the 1.06-support level. Below 1.0570 we may see further losses towards 1.0480.

The British pound took a brief glimpse above 1.23 but was not able to stabilize above that high level. The 1.21-level will now be back in focus and if the pound drops below that mark, we expect a next lower target to be at 1.20. The beginning of next week is going to be interesting for sterling traders as U.K. Prime Minister Theresa May will set out her Brexit vision in a speech on Tuesday. Recent speculation about a so-called ‘hard Brexit’ has increased the pressure on the pound.

Today we will watch important economic data releases such as U.S. Retail Sales, scheduled for release at 13:30 UTC and University of Michigan Confidence due at 15:00 UTC. The Retail Sales report is expected to show an uptick in December and should this be confirmed, the dollar could recover even more quickly.

Have a nice weekend.

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

 

 

 

Thin Liquidity Before The Christmas Break?

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Dear Traders,

We are entering the final trading period of this year while financial markets are gradually becoming quiet.

Now that top-tier event risk is largely exhausted for the remaining trading days of 2016 we saw some corrective price action last Friday with some profit taking in the U.S. dollar. Nonetheless, there was nothing to be gained for us as currency fluctuations have been modest given the year-end liquidity drain. We recommend securing your monthly and annual profits now and trading at a low risk in the pre-holiday period.

From a technical perspective there is the possibility of further corrective movements in the dollar on the back of profit taking, driving the euro towards 1.0530 while the cable may tend to test the 1.2550-resistance level. Above 1.2570 the pound sterling may head for a test of 1.2650/80. A current support is however seen at around 1.2425.

The euro traded consolidated at around 1.0450 and if it holds above 1.0420 we may see a run for 1.0530. Below 1.04 however, we favor a bearish bias targeting at 1.03.

However we do not expect exaggerated movements within the next days and will take potential profits at smaller targets. The economic calendar is very light in terms of market moving data. The most interesting piece of data could be U.S. Durable Goods Orders alongside the final estimate of third-quarter GDP (Thursday), while the German IFO report scheduled for release today at 9:00 UTC could be worth watching for euro traders.

Furthermore, Fed Chair Janet Yellen speaks on the state of the job market today at 18:30 UTC.

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 2016 Maimar-FX.

www.maimar.co