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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.

www.maimar.co

 

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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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

 

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.

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