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Euro Roses Toward 1.17, Traders Await PCE Index

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The U.S. dollar dipped after data showed that U.S. growth slowed more than expected in the third quarter. The greenback’s weakness benefited other counterparts such as the euro which rose toward 1.17.

European Central Bank President Christine Lagarde pushed back on interest rate increases, saying markets are ahead of themselves. Lagarde acknowledged that inflation will last longer than originally anticipated. ECB policy makers expect inflation to exceed the 2 percent target next year but hold different views on whether inflation will persist in 2023.

The market, however, still sees faster rate increases with rate-hike bets being trimmed only slightly after the ECB’s press conference.

The euro rose to a high of 1.1692 and if euro bulls are able to overcome the 1.17-hurdle we will shift our focus to higher highs at 1.1730 and 1.1750. For bearish momentum to accelerate we must see a renewed drop below 1.1620 but more importantly below 1.1590.

Today we have the PCE Price Index scheduled for release at 12:30 UTC which could affect the dollar’s performance.

Have a beautiful weekend.

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USD Holds Onto Gains, Focus On PCE Index

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Sentiment remains dominated by mounting fears about slowing economic growth, elevated inflation, supply-chain bottlenecks and a global energy crunch. The U.S. dollar holds onto its gains heading into the weekend with market participants bracing for the Federal Reserve to wind down its stimulus.

Next week’s focus will be on the non-farm payrolls report that is expected to show more than double the job gain from August.

Today we will keep an eye on the U.S. personal consumption expenditures index (PCE) due for release at 12:30 UTC. Bear in mind that the Fed uses the PCE price index as its main measure of inflation. A surprise reading could thus impact the greenback.

EUR/USD: A next crucial target for bears is seen at 1.15. On the upside, we expect a resistance to come in at around 1.1670.

GBP/USD: We see a lower target at 1.3350 now. Breaking however below 1.3280 could see an extended slide towards 1.3180. A current resistance is seen at 1.36.

DAX: Bears, watch out for lower targets at 15000 and 14900. A break below 14800 could generate an even stronger sell signal towards 14400. For a bullish breakout on the other side, we would need to see prices above 15650.

Have a good weekend!

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EUR/USD Tests 1.17-Support, More Losses To Come?

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Welcome to the last week of September. The euro was unmoved at this week’s opening as the German election failed to produce a clear winner. Following the tight election, the Social Democrats edged ahead of Merkel’s conservative bloc. Germany is set for a three-way coalition, led by SPD’s Olaf Scholz but it could take months of negotiations and uncertainty to form a coalition. The euro was steady this morning, holding above 1.17.

Following last week’s hawkish messages from the Federal Reserve and the Bank of England, the greenback and the pound sterling could gain traction but it will also depend on the market’s risk appetite for other peers. We will keep an eye on the technical picture in order to validate potential price breakouts in the coming days.

Compared to the last week, we do not have the heavy docket of event risks this week but traders should keep an eye on the European Central Bank’s forum panel on Wednesday that brings together heads of the Fed, ECB, BoE and BoJ. The top listing for data will be Friday’s PCE deflator, the Federal Reserve’s favorite inflation indicator. Furthermore, Fed Chair Jerome Powell and Treasury Secretary Yellen will testify at a Senate Banking Committee on Tuesday.

EUR/USD: We expect the pair to trade between 1.1770 and 1.1660. A clear break above 1.1770 could open door for a test of 1.1830. Below 1.1640, bears will gain control.

GBP/USD: As long as the cable remains above 1.36, chances are in favor of the bulls with a higher target at 1.3880. Falling below 1.36 could see a dip towards 1.35.

 

Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

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Copyright © All Rights Reserved 2021 MaiMarFX.

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British Pound Falls On Brexit Concerns

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Dear Traders,

The U.S. dollar ended the month of February higher against other major currencies such as the euro and pound sterling.

Recently, however, it was not only the dollar’s strength that drove major pairs lower. The British pound came under increased selling-pressure as U.K.’s Prime Minister Theresa May rejected a proposed Brexit draft from the EU. The document contained details about the U.K.’s exit from the EU bloc. May is due to deliver a speech tomorrow so the price action in the pound could be volatile or even messy ahead of that speech.

Today, traders will be watching the PCE Core (13:30 UTC), the Fed’s favorite inflation indicator and the Manufacturing ISM report (15:00 UTC). Furthermore, we have a second appearance from Fed Chairman Powell before the Senate Banking Committee today at 15:00 UTC, but the market could remain largely unaffected by today’s testimony.

EUR/USD: The euro dropped below 1.22 but still holds above 1.2165 which means that it finds itself within a crucial support zone. We have the Italian election on Sunday, so investors may take profits ahead of the weekend which could lead to further losses in this pair. As mentioned in previous analysis, the next crucial price level will be 1.2160 and for euro bears it would need a sustained break below that level in order to anticipate further downward momentum. A current resistance area is seen between 1.2250 and 1.23.

GBP/USD: The pound declined on Brexit concerns and we now expect a next lower target to be at 1.36. However, traders should be careful trading the pound as the price action in the pound could become messy ahead of May’s Brexit speech tomorrow. We now expect prices to accelerate between 1.40 and 1.36.

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Euro Drops In Thin Pre-Holiday Trade

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Dear Traders,

The euro dropped in early Asia trading after Catalan separatists won the snap election in the region, reflecting once again Catalonia’s desire for independence from Spain. We were able to benefit from the downward move as our short trade hit the larger profit target at 1.1818. As long as the euro remains above 1.1760 we maintain a neutral stance in the EUR/USD. On the upside, a break above 1.1925 could spark some bullish momentum towards 1.1970.

The U.S. dollar slightly weakened against most of its major peers on the back of an unexpected downgrade of the third-quarter U.S. GDP, but the market’s reaction was muted in thin pre-holiday trade. The PCE deflator along with Durable Goods Orders is scheduled for release today at 13:30 UTC but with many market participants already being offline ahead of the Christmas holiday we do not expect larger market swings.

The pound sterling continued to trade within a narrow sideways trading range between 1.3390 and 1.3330 and thus, none of our yesterday’s entries was triggered.

U.K. Q3 GDP figures are scheduled for release at 9:30 UTC but no changes are expected. We expect GBP/USD to trade between 1.3450 and 1.3250 in the near-term.

We wish all traders and readers Merry Christmas and a Happy New Year 2018!

Christmas Trading Break: There will be no signal service during our Christmas holiday break between December 25 and January 4. Our signal service will be resumed on January 4.

 

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Pound Drops On Risks Of Hard Brexit But Sideways Trading-Range Remains Intact

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Dear Traders,

Heading into the final trading days of 2017, volatility is expected to remain low in the run-up to the Christmas holiday. There are no significant drivers or market-moving data releases on the economic calendar which is why we recommend taking a cautious approach to new investments now.

The British pound fell to a low of 1.3301 last Friday on risks of a hard Brexit. The second phase of Brexit negotiations between the U.K. and EU will be even harder than the first and investors are skeptical that U.K. Prime Minister Theresa May will achieve a soft landing when U.K. leaves the EU in 2019.

GBP/USD

While we currently favor a sideways trading range between 1.3480 and 1.3280 the risk appears to be tilted to the downside. If the pound falls below 1.3260 we expect further losses towards 1.32. However, even if larger movements are unlikely given the liquidity drain, traders should always expect the unexpected.

EUR/USD: The euro was little changed with the crucial support at 1.17 remaining intact. As long as the euro trades between 1.1920 and 1.17/1.1660 there is nothing new to report.

The economic calendar is relatively quiet this week. The U.S. GDP report (Thursday) may receive some attraction even though no surprises are expected. Traders may also keep an eye on the PCE Index and Durable Goods Orders (Friday) but all these reports might be of less importance as the year draws to a close.

Sterling traders may listen to comments from Bank of England Governor Mark Carney on Wednesday when he speaks at a Parliament Hearing in London.

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We wish you good trades and many pips!

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Pound Is Flying High, Next Targets To Watch Out For

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Dear Traders,

The British pound extended its gains and jumped higher towards the next hurdle around 1.35-1.3515. Traders who traded the bullish movement yesterday had, however, to struggle with limited upside swings and short-term corrections before the pound was ready for another leg higher. Reportedly, Dublin and London are close to an agreement on the Irish border which will allow Brexit talks to move forward. The Irish border is a main obstacle in separation talks. The latest progress in the divorce talks has thus pushed the pound to fresh highs.

Given the strong rally we anticipate further gains in the GBP/USD. Next higher targets could be at 1.3515 followed by 1.3570. On the bottom side, it would require a renewed break below 1.3250 to reinvigorate bearish momentum.

The EUR/USD found some support near 1.1820 from where a reversal started. As noted in yesterday’s analysis, as long as the euro remains well above 1.18, we favor a bullish bias anticipating higher targets at 1.19 and 1.20. If the euro falls however below 1.1830 and further 1.18, we could see bears taking over.

Euro traders should keep an eye on the Eurozone Consumer Price Index, scheduled for release at 10:00, which could lead to some upside swings in the EUR/USD. From the U.S. we have the PCE deflator scheduled for release at 13:30 UTC which is the Fed’s favored inflation measure.

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