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Euro And Cable Consolidate Following Strong Moves

Dear Traders,

The British pound gave up some of the gains it had made on Tuesday and fell back below 1.28. As long as the pound remains above the 1.26-mark, the recent drop could be considered a correction within the recent uptrend. We will now focus on a break above the short-term resistance at 1.2860. Once that level has been breached to the upside, sterling could make a run for 1.2950. A short-term support could however be at 1.2750 and 1.2720.

Bank of England Governor Mark Carney is scheduled to speak at an event in Washington today at 17:30 UTC and his comments could have an impact on the pound, provided that he refers to the BoE’s monetary policy.

The euro held above the 1.07-level and market participants seem to be shying away from taking any positions in the EUR/USD ahead of France’s presidential election this weekend. From a technical perspective, we see a symmetrical triangle in the 4-hour chart which could predict small breakouts.

Above 1.0720 the euro could rise towards 1.0760, whereas a break below 1.07 may send the euro towards 1.0675. However, given the risk aversion in the market we do not expect larger fluctuations within the next 48 hours.

 

From the U.S., we have the Philadelphia Fed Index due for release at 12:30 UTC but we doubt that this report will have a major impact on the greenback.

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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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Much Ado About Nothing

Dear Traders,

In the end there was ‘much ado about nothing’. Market participants who had hoped for immediate sustainable moves after the Fed’s decision, were disappointed. The price action was relatively muted with only small fluctuations to both sides. In the end the U.S. dollar was the winner and accelerated against the euro and British pound.

Federal Reserve policy makers unanimously voted to raise interest rates up to 0.5 percent. This alone was the most hawkish scenario as there were no dissenters. Moreover, policy makers forecast an appropriate rate of 1.375 percent at the end of 2016, indicating four rate increases next year. This is unambiguously less dovish than the market anticipated. The FOMC is confident that inflation will rise and highlighted that the risks to the outlook for economic activity and the labor market are now “balanced”.  On the bottom line the Fed statement encouraged dollar bulls not to give up on the dollar rally in the long-run. Nonetheless, we expected more momentum on that historic day. Investors are likely to begin their holiday season now, a reason for smaller movements and a decline in volume.

Important data for today (timezone GMT):

9:00 EUR German IFO Report

9:30 UK Retail Sales

13:30 USA Philly Fed Index 

The reports could have a short-term impact on the currency pairs, but market participants are likely to digest the new Fed era and could be looking to buy dollars at lower levels. We therefore generally expect a bearish bias.

EUR/USD: Traders should pay close attention to the 1.08-level. If the euro falls below 1.0780, we see chances that it drops 100-200 pips towards the south.

GBP/USD: The focus is on the 1.49-barrier. Once this level is significantly breached, GBP could find a next support at 1.4820/15.

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Copyright © All Rights Reserved 2015 Maimar-FX.

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Market is pricing in a Fed Hike Delay

Dear Traders,

The FOMC Meeting Minutes failed to impress yesterday. While minutes were three weeks old, not taking into account China’s recent devaluation of the Yuan, there was no clear signal for a September liftoff. Rather, FOMC members were divided on the right time of a rate hike. With only one member voting for a September liftoff, market participants reduced the probability for such a step next month, sending the U.S. Dollar to lower levels as a result.

Within a quiet trading environment and with most market participants still on holiday, traders did not get any chance of huge profits. We will have to wait until September in order to trade larger market reactions.

While the euro has appreciated in value, the pound sterling bounced back from its 1.57-resistance.

Overview about current resistance and support-zones:

  Resistances Supports
EUR/USD 1.1155

1.1185

1.1210

1.11

1.1050

1.1015

 

  Resistances Supports
GBP/USD 1.57

1.5750/75

1.58

1.5645

1.5575/55

1.5470

Today, there is some interesting economic data from U.K. and USA due for release, which could impact on the currencies:

8:30 UK Retail Sales

12:30 USA Continuing & Initial Jobless Claims

14:00 USA Existing Home Sales

14:00 USA Philly Fed Index  

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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

 

 

First Fed-move expected in September – Focus now on ECB

Dear Traders,

While sterling bears had to struggle with multiple short-entries, making it a strenuous trading day, euro trader’s efforts paid off. The euro traded lower on stronger U.S. data and hawkish comments from Janet Yellen, providing euro bears many green pips.

Yellen is optimistic and expects U.S. growth to strengthen over the rest of 2015. She said that “every FOMC meeting is a Live meeting”, which means that the Federal Reserve could raise rates at any meeting. She stressed that the pace of policy tightening is more important than the timing of the first rate increase. In other words, a September liftoff is still possible, increasing the demand for U.S. dollar.

Greek parliament approved new austerity measures

229 members of the 300-seat parliament in Athens accepted the agreement with creditors, paving the way for more emergency funds. The focus shifts now to the European Central Bank which must weigh the level of emergency liquidity assistance (ELA) in order to help Greek banks to re-open after more than two weeks.

The ECB will also decide on monetary policy at 11:45 GMT followed by the ECB Press Conference led by Mario Draghi at 12:30 GMT. Before the ECB decision, it should be important to watch the release of Eurozone Consumer Prices at 9:00 GMT. If data fails to meet the market’s expectation, it could lead to a strong reaction in the EUR/USD.

Furthermore, Fed Chair Janet Yellen delivers her testimony at 14:00 GMT along with the release of the Philadelphia Fed survey.

Today is our last trading day before our summer holiday break.We will leave for summer holiday from tomorrow until 31/07/2015 and will resume the signal service on August 3rd.

Until then we wish you successful trading and enjoyable summer days.

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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