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Euro And Cable Are Stuck In Tight Ranges

Dear Traders,

As expected, the FOMC minutes failed to trigger any major market movements and both currency pairs traded boringly within tight trading ranges. Consequently, there was nothing to be gained for traders.

Many Federal Reserve officials saw increased downside risks to the outlook for the U.S. economy if the recent global market turmoil, including the slowdown in China was sustained, the minutes showed. While rate hike expectations for 2016 have been gradually priced out, there is still a small chance for the Fed to raise interest rates in the middle of the year. Policy makers emphasized that the timing and pace of adjustments will depend on future economic and financial developments and so, if the U.S. economy continues to improve the Fed could follow its path of further tightening.

We will wait and see and focus on technical conditions. The EUR/USD formatted a current trading range between 1.12 and 1.11 and traders should rather wait for any sustained breakout above or below that range. If the euro breaks above 1.1215, there is a next hurdle at 1.1240/50, which needs to be broken before we can shift our focus to 1.13 again. On the downside, we expect the 1.1085-70 area to be crucial for further bearish momentum. With a break of 1.1070, we could see the euro falling towards 1.1050 and 1.0990.

The GBP/USD remained well above 1.4240 but was not able to exceed the 1.4340-level. Once the 1.4340-level will be breached to the upside, sterling could rally towards 1.4380 and 1.44. Above 1.4410 the next crucial level could be at 1.4450. However, below 1.4270 we will turn our focus towards the 1.42-mark.

Today we will keep an eye on the following important economic reports which may have an impact on the currencies:

12:30 EUR ECB Meeting Minutes

13:30 USA Philly Fed Index

16:00 USA Crude Oil Inventories

(Time zone GMT)

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Roller Coaster Ride In Both EUR/USD And GBP/USD

Dear Traders,

Both EUR/USD and GBP/USD experienced a roller coaster ride yesterday and while short-traders initially achieved good profits, some of these gains were lost owing to the strong rebound. In the end, both major currency pairs ended the day more or less unchanged against the U.S. dollar.

The euro slid to a low of 1.0778 on dovish comments from ECB president Mario Draghi. While interest rates were kept unchanged, he readied the market for more stimulus at the next ECB meeting in March and traders got what they have been looking for: A strong hint that the ECB is willing to increase stimulus. Draghi said officials will review their programs in March and there are “no limits” on how far the central bank is willing to deploy additional measures within mandate. He signaled concerns about low commodity prices and their effects on inflation and said that policy makers “have to be vigilant about that”. Further clues on the inflation outlook will be published in the Quarterly Survey of Professional Forecasters, scheduled for release today at 9:00 GMT.

Draghi is scheduled to speak today at 7:45 GMT in Davos.

While a dovish ECB was enough to sent the euro in the short-term lower, it is still not enough to change the overall sentiment immediately. But at least yesterday’s statement will put pressure on the EUR/USD and traders should generally favor the downtrend. Below the important support at 1.08 the euro marked a second support at 1.0775, which needs to be broken in order to revive further bearish momentum towards 1.0730 and 1.0665.

The British pound followed the roller coaster ride and rose from its fresh 1.4079-low to 1.4249. Current resistances could be intact at 1.4250 and 1.4285/1.43, while recent support-areas are seen at 1.4155, 1.4130 and 1.4080/65.

Important U.K. economic data is scheduled for release at 9:30 GMT with the U.K.Retail Sales report. Economists are looking for a weaker report and if they are right, sterling could continue its downtrend.

From the euro zone we have the German Manufacturing and Services PMI, due at 8:30 GMT, which could have a short-lived impact on the euro.

Furthermore, U.S. Manufacturing PMI scheduled for release at 14:45 GMT and Existing Home Sales due at 15:00 could only have a small impact on the dollar.

We wish you a beautiful weekend.

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Will 2016 Be A Year Of Further Dollar Strength?

Dear Traders,

Happy New Year! We hope you have had a good start into 2016 and wish you all the best for the New Year and, of course, many profitable trades.

At every beginning of the year many market participants wonder what they can expect from the new year. There has already been speculation as to whether the dollar rally will last another year or not. After three straight years of gains the odds are in favor of the U.S. dollar, even though the Federal Reserves’s monetary tightening cycle could weigh on U.S. growth. It will therefore be a challenge for the Fed to raise interest rates to an appropriate level which allows responding to economic setbacks. We generally expect the greenback to strengthen in the coming months as the Fed is forecast to continue raising interest rates. But as we all know, appearances can be deceptive and traders should bear in mind that both major currency pairs could be bottoming out if Fed officials begin to backtrack their hawkish views.

What is important for this week?

There are plenty of important data releases this week, but since the market participation may be slow in the first weeks of January, the impact of economic data could be limited. The focus will be on Consumer Prices from the Eurozone, scheduled for release on Monday and Tuesday. Furthermore, the Fed will release the FOMC minutes from its December meeting on Wednesday. The minutes are unlikely to have a significant impact on the dollar as the FOMC voting membership rotates every year, which is why some central bankers who voted for a rate hike last year are no longer voting members this year. Moreover, all eyes will be on the U.S. Employment data on Friday. If payrolls growth exceeds 200k alongside a strong rise in average hourly earnings, the dollar could be poised for further gains.

Let’s take a brief look at the technical side:

EUR/USD

The euro traded consolidated in a 1.10-1.08 trading range. We will need to wait for breakouts of this range in order to see fresh momentum. In the near-term we expect the euro being capped from 1.0950 and 1.10. A sustained break above 1.10 could invigorate bullish momentum towards 1.1050 and 1.11. On the bottom side the 1.08-level will be key and it would require unambiguous positive U.S. data to push the pair through this support.

Chart_EUR_USD_4 Hours_snapshot04.01.16

GBP/USD

Based on the recent bear trend we see a next important support area at 1.4635 and further 1.4560. However, given the latest strong downward move, chances are that sterling shows some corrections in the short-term. Current resistances are seen at 1.4850 and 1.4950.

 

Chart_GBP_USD_Daily_snapshot04.01.16

Important data for today:

8:55 EUR German Manufacturing PMI

9:30 UK Manufacturing PMI

13:00 EUR German Consumer Price Index

15:00 USA ISM Manufacturing

(Timezone GMT)

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Markets Are Expected To Be Quiet

Dear Traders,

The euro fell to the weakest level in seven months on speculations the European Central Bank could be more aggressive in stepping up additional measures to stimulate the economy. While the market expects the ECB to expand stimulus when it meets next week, the central bank may surprise the market with an even more aggressive move. Some analysts expect the ECB to cut the deposit rate by more than the market expects next Thursday. In any case, the EUR/USD is likely to remain under pressure. A next bearish target could be at 1.0555.

The British pound however, failed to show a sustained trend yesterday, trading sideways between 1.5136 and 1.5055. Next important resistances could be at 1.5155 and 1.5180, whereas sterling bears should keep an eye on a break of the 1.5050-level, targeting the 1.5030- and 1.50 level.

GBP/USD – 4 Hour Chart

Chart_GBP_USD_4Hours_snapshot26.11.15

U.S. financial markets are closed today for Thanksgiving, so the trading environment is expected to be very quiet. Nonetheless, we know from others years, that on Thanksgiving Thursday a clear trend has frequently been established. Moreover, the Friday after Thanksgiving tended to show even bigger moves, so it could be worthwhile for investors to remain engaged.

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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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Euro Appeared Unaffected By Geopolitical Tensions

Dear Traders,

The euro remained resilient amidst heightened tensions between Turkey and Russia. The European currency was capped at 1.0670/75, resulting in a barrier for any bullish engagements. While other currencies such as the JPY benefitted from safe haven flows after geopolitical tensions overshadowed financial markets, the U.S. dollar received less attraction as a safe haven. Political analysts consider a major escalation unlikely given the risks associated with any conflict between Russia and Turkey as a NATO member.

The British pound traded lower on dovish comments from Bank of England officials. BoE Governor Mark Carney said in testimony to lawmakers that interest rates are likely to remain low for some time. BoE Chief Economist Andrew Haldane sounded even more dovish saying risks to the inflation outlook were to the downside. So all in all, given the bleak outlook, sterling could be vulnerable to further losses in the near-term. The currency pair marked a recent support at around 1.5050. Next target is 1.50.

Yesterday’s U.S. data came in mixed and failed to trigger a big reaction in the USD. The focus will now shift to Personal Consumption Expenditure and Durable Goods Orders, scheduled for release at 13:30 GMT. U.S. New Home Sales are due for release along with Michigan Confidence at 15:00 GMT.

EUR/USD

The euro is trending downwards. A current resistance can be found at 1.0690/1.07. Any bullish breakouts above 1.07 are likely to be limited until 1.0760-75. A lower support could currently be at 1.0575, from where some pullback may occur.

Chart_EUR_USD_4Hours_snapshot25.11.15

 

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Sterling Trades Higher, Euro Remains Consolidated

Dear Traders,

The British pound knew only one direction yesterday: Upwards. U.K. employment data came in mixed, whereby wage growth slightly missed the market’s expectations, but sterling continued its recent recovery against the greenback and traded significantly above 1.52.

It was not a good day for euro traders. The euro traded consolidated between 1.0775 and 1.0705 and failed to show any profitable momentum. As long as there is no catalyst pushing the pair into a clear direction, the EUR/USD could be trading in a sideways range. If  the currency pair is able to break above 1.0790 we see next resistances at 1.0810 and 1.0830. Current supports are seen at 1.0705 and 1.0680.

EUR/USD

With prices above the current trading range, the euro may head for a test of the resistance line at around 1.0820/30, from where reversals may become more likely. Fresh bearish momentum is likely to increase with a break below 1.0680/70.

Chart_EUR_USD_4Hours_snapshot12.11.15

There are no major important reports due for release today. U.S. Initial Jobless Claims, scheduled for release at 13:30 GMT could only have a limited impact on the U.S. dollar. Furthermore, Fed presidents Bullard, Evans and Dudley are due to speak on economy and monetary policy.

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Euro Trades Sideways, Cable Lacks Direction

Dear Traders,

There was only little consistency in the currencies’ performances yesterday. While the euro preferred to trade sideways, the cable has been torn between better than expected U.K. PMI data and the neutral outcome in U.S. Manufacturing. GBP/USD still remains below 1.55 and traders are wondering if the Inflation report, scheduled for release on Thursday, could help the pound for a break through its key resistance.

Let’s wait and see. Before “Super Thursday” we will keep an eye on the U.K. PMI reports. The U.K. Construction PMI is due for release at 9:30 GMT today. Furthermore U.S. Factory Orders are scheduled for release today at 15:00 GMT but this report is unlikely to have a significant impact on the USD.

ECB president Draghi will speak at the opening of the European Cultural Days today at 19:00 GMT.

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Yellen sends clear signal

Dear Traders,

While the British Pound tortured traders with fake-outs and choppy moves, the euro was heading for a test of the 1.13-area. The short recovery in the EUR/USD was still driven by Mario Draghi’s comments, who said on Wednesday that ECB policy makers will wait before discussing on a QE extension. After failing at $ 1.13, dollar bulls took control and drove the pair back below $ 1.12.

The U.S. dollar received support from Federal Reserve Chair Janet Yellen saying that the Fed is on track to raise rates this year. During her speech in Amherst, Massachusetts, she sent a clear signal, that Fed policy makers believe that a rate hike is appropriate this year, followed by a gradual pace of tightening thereafter.

What is important for today?

Revisions to second-quarter U.S. GDP (12:30 GMT), the U.S. PMI reports (13:45 GMT) and the University of Michigan Consumer Sentiment index (14:00 GMT) are the only second-tier data scheduled for release today.

If GDP figures meet the expectations, the impact on the dollar could be limited.

Given the hawkish outlook for the U.S. dollar in the near-term, we are generally looking for further gains in the USD.

Have a nice weekend.

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We wish you good trades and many pips!

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Upside breakouts

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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We wish you good trades and many pips!

Any and all liability of the author is excluded.

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Time for a short breather today?

Dear Traders,

After the panic moves from Monday, the market corrected sharply yesterday. The euro experienced a correction, dipping slightly below 1.14 from where it recovered all of its losses towards the end of the day. The British pound rose above 1.58, but failed to hold this level and dropped sharply towards 1.5680. We see the cable still trading within an upward channel, which ranges from 1.58 until 1.5670/65. Above or below these levels, we expect fresh momentum to accelerate.

What is important for today?

The most important piece of economic data will be U.S.Durable Goods Orders, scheduled for release at 12:30 GMT. Economists expect a decline in July, which could put further pressure on the USD. Given the recent market swings, we might see a consolidation today – let’s be surprised.

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