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How High Can The Pound Go?

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Is The Pound Poised For Further Price Gains?

Dear Traders,

The U.S. dollar continued to weaken against the British pound and euro. Investors have been looking for further details on Trump’s plans to boost growth and government spending but there are no specific details given yet. In the long term however, this does not mean that the dollar rally is over. The greenback might continue its weakness on the lack of certainty but if president Trump delivers on his economic promises the dollar could quickly recover. Some economists, however, forecast the strong dollar to continue and even expect the dollar to reach parity with the euro by the end of the year. Let us wait to be surprised.

The euro still remained within its recent uptrend channel, albeit with a slight extension to a high of 1.0773. Yet, there was no bullish breakout and we will focus on prices above 1.0775 in order to buy euros towards 1.08/1.0850. A current support is however seen at 1.0660/50. The German and Eurozone PMI reports are scheduled for release at 8:30 and 9:00 UTC but we do not expect these reports to have a major impact on the euro.

The pound sterling knew only one direction: upwards. The pound headed for a test of its resistance zone around 1.2550 and it will now be interesting whether there is still room for further gains. Above 1.2570 we expect the pound to head for 1.2640 and 1.2690. How sterling will trade today also hinges on the U.K. Supreme Court ruling on the Parliament’s role in Brexit. It is expected that the High Court will vote in favor of Parliament’s approval in triggering Article 50. This decision may send the pound even higher. The ruling will be announced at 9:30 UTC and traders should prepare for volatile swings in the GBP/USD. Whatever the case, if the pound drops back below 1.24, we expect bearish momentum to accelerate.

From the U.S. we have Existing Home Sales due for release at 15:00 UTC but this report is unlikely to have a significant impact on the greenback.

Daily Forex signals:

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We wish you good trades and many pips!

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U.S. Dollar Takes A Breather While Euro And Pound Recover Slightly

Dear Traders,

We got what we have been looking for: A breakout of the cable’s narrow trading range. While an initial attempt to buy sterling above 1.2235 proved unsuccessful, breakout traders were later able to profit from the pound’s sharp drop towards 1.2080. Sterling tumbled before BoE Governor Carney’s testimony to the House of Lords Tuesday but bounced back from its fresh low of 1.2082 as Carney said there were limits to the Monetary Policy Committee’s (MPC) willingness to look beyond an overshoot of their inflation target. In other words, his comments on inflation mean that further easing is unlikely in the near term, highlighting policy makers’ concerns about the risk of stagflation, which arises from the depreciation of the pound.

Carney’s recent comments suggest the MPC will stick to the sidelines at the next ‘super Thursday’ event on November 3.

Technically the pound remains confined to a recent 100-pips trading range between 1.2250 and 1.2150. Above 1.2250 it could head for a test of 1.2320 whereas a break below 1.2130 may drive the GBP/USD to fresh lows around 1.2050.

The EUR/USD however, failed to show larger movements yesterday and remained stuck between 1.09 and 1.0850. It was the second consecutive trading day on which none of our signal entries was triggered. European Central Bank President Mario Draghi defended the ECB’s easy monetary policy but conceded that low interest rates are not ‘costless’ for the eurozone and policy makers “certainly prefer not to have to keep interest rates at such low levels for an excessively long time”. Draghi’s ‘neutral position’ drove the euro higher but gains were capped at 1.09 for the time being. We are still looking for a significant break above 1.09 but any upward movements could be on a shaky footing as a next resistance is seen at 1.0950.

There are no major economic reports scheduled for release today. The only reports come from the U.S. and will be Advance Goods Trade Balance at 12:30 UTC, Services PMI at 13:45 UTC and New Home Sales at 16:00 but none of these reports is expected to have a major impact on the greenback.

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 2016 Maimar-FX.

www.maimar.co

 

 

 

Will The BoE Deliver Or Disappoint?

Dear Traders,

The U.S. dollar slightly advanced versus the euro after the ADP report came in better than expected. Unlike the euro, the British pound lacked direction before the Bank of England’s rate decision and fluctuated within a sideways range of 100 pips.

Today, there is only one subject in the market: The Bank of England rate decision and Inflation Report, scheduled to be released at 11:00 UTC. Our focus therefore shifts to the GBP/USD as we prepare for volatile swings. While a 25bp rate cut is widely expected, the price action will depend on how aggressive BoE policymakers will support their dovish stance. If they signal further easing in the near-term, the pound could quickly fall towards 1.32 and even lower. On the other hand, if the central bank is in no hurry to introduce further easing except the anticipated 25bp rate cut, investors could be disappointed and give up on their short positions. The pound could surge as a result of a less dovish BoE.

However, as stated in yesterday’s analysis the 1.3420 level could act as a crucial resistance for the pound. Hence, gains could be limited until 1.3425 and 1.3480. Only a significant break above 1.35 would change the bias in favor of the bulls. On the bottom side, we will focus on the 1.32-level. In case sterling drops below 1.3170 we see chances of an extended downward move towards 1.3030.

Given the fact that today’s focus is on the pound sterling, we do not expect larger fluctuations in the EUR/USD. The euro could trade sideways between 1.12 and 1.11. We recommend traders not investing too much today and take profits at smaller targets if there are any.

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

 

 

 

Bullish Bias On GBP/USD As BoE Policymakers Wait For August

Dear Traders,

Investors were caught on the wrong foot as the Bank of England has held interest rates steady at 0.5 percent and thus refrained from prematurely responding to the clouded economic outlook. Market participants priced in more than an 80 percent probability the BoE would lower the rate in July and were therefore disappointed. The pound jumped more than 240 pips from our long-entry in an immediate response to the decision. However the focus now shifts to the BoE’s next monetary policy meeting in August when the central bank will make a full assessment with new forecasts in its inflation report. Until then the performance of the pound will be determined by risk appetite. Nonetheless traders should bear in mind that the pound remains a sell on rallies and it might be worthwhile therefore to sell the pound at crucial resistance levels.

Technical outlook GBP/USD (for subscribers):

The euro rose in tandem with the pound but gains were limited until the upper bound of the euro’s current trading range. Once the common currency is able to break above 1.1170 we could see a test of 1.1215 in a next step. However, the performance of the euro will be determined by risk appetite and U.S. data. The most important piece of U.S. data this week will be Retail Sales scheduled for release at 12:30 UTC alongside the Consumer Price report. Eurozone CPI data (9:00 UTC) is, however, not expected to have a significant impact on the euro as no changes are forecast.

Last but not least, Michigan Confidence is due for release at 14:00 UTC but the focus will be on retails sales and CPI figures.

We wish profitable trades for today and a beautiful weekend.

Daily Forex signals:

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

 

 

 

Upcoming Downward Move On BoE Financial Stability Report?

Dear Traders,

Markets were quiet Monday with both major currency pairs fluctuating within narrow ranges. Unfortunately, breakout-traders had more to lose than to gain as both euro and cable trended sideways without showing any sustained price breakout. However, this may change today with Bank of England Governor Carney outlining the central bank’s macroprudential tools to support the economy in a post-Brexit world. After signaling a willingness to cut interest rates in the near-term, the governor is set to present the financial-stability assessment today at 9:30 UTC.

The governor will give a press conference 30 minutes after the publication of the Financial Stability report. The report and Carney’s rhetoric will be main risk events for traders on Tuesday and could significant influence the pound sterling as well as the euro.

Before coming to the BoE report, Eurozone Retail Sales and U.K. PMI numbers are scheduled for release but these reports are not expected to have a significant impact on the currencies. From the U.S., we have second-tier data such as Factory and Durable Goods Orders scheduled for release at 14:00 UTC.

From a technical perspective we are still looking for breakouts above 1.3340 or below 1.3240 in the GBP/USD and respectively, above 1.1170 or below 1.1070 in the EUR/USD.

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 2016 Maimar-FX.

www.maimar.co

 

 

 

Market Absorbed Brexit Shock But Don’t Get Fooled By The Upward Correction

Dear Traders,

Markets stabilized for a second consecutive trading day with the euro rising above 1.11 and the pound touching a high at 1.3534 after the 1.3280-level has proved to be a short-term support. Market participants have got over the Brexit shock from last Friday since a worst-case scenario for the EU and a contagion effect seem relatively unlikely. The focus is therefore gradually shifting back to monetary policy. Economists predict that the Bank of England will cut interest rates before the end of the year, while they see only little chances of a rate increase by the Federal Reserve this year. This fact could limit dollar gains in the short-term, whereas the pound sterling remains under pressure. The price direction will mainly hinge on risk appetite for each currency, although any new hawkish hints from Fed policymakers would provide a boost to the U.S. dollar.

Bank of England Governor Carney is scheduled to speak at 15:00 UTC today and any dovish comments could drive the pound lower. The U.K. GDP is due for release at 8:30 UTC but given the recent uncertainty this report is not expected to have a significant impact on the pound.

GBP/USD

We see the pound formatting a short-term upward channel after its sharp selloff. Once it breaks below that channel, falling back below 1.3370, we expect a higher likelihood of renewed downswings towards 1.3290, 1.3220 and 1.31.

However, above 1.3480 the pound could head towards the upper bound of the trend channel, which is currently around the 1.36-level.

Chart_GBP_USD_4Hours_snapshot30.6.16

 

The euro tested the 1.1130-resistance level, from where it first reversed. As stated in previous analysis we only expect further upward momentum after a significant break above 1.1135/40. However, if the euro breaks below 1.1080, we may see a decline towards 1.1035, 1.0990 and 1.0890.

From the Eurozone we have the German Unemployment report due for release at 7:55 UTC, followed by Eurozone Consumer Prices due at 9:00 UTC. If these reports are in line with expectations the impact on the euro will be limited.

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 2016 Maimar-FX.

www.maimar.co

 

 

Pound Takes Breather While The Euro Stabilizes Around 1.1050

Dear Traders,

While the British pound extended its record selloff in the aftermath of last week’s vote, the euro traded sideways Monday, straining the nerves of breakout-traders as price movements were limited to either side. The euro gained some ground above the 1.0970-level, but this does not necessarily mean that bearish momentum has already been exhausted. If the euro breaks again below 1.10 we see chances of a renewed downslide towards 1.0950 and 1.09. On the other hand, if the euro climbs above 1.1085 a next crucial resistance level is seen at 1.1133. The euro would need to break that level significantly in order to invigorate fresh bullish momentum.

Chart_EUR_USD_4 Hours_snapshot28.6.16

The pound sterling tagged a fresh low at 1.3120 from where it started a relief rally. The focus will now shift to the 1.3475-resistance and in case sterling is able to take this hurdle, we could see a rally towards 1.37 and 1.3780. However, if GBP remains below 1.3360 we favor a bearish stance with a next lower target at 1.3050.

From the U.S. we have revisions to first-quarter GDP scheduled for release at 12:30 UTC followed by Consumer Confidence at 14:00 UTC. Theses reports may have an impact on the greenback but for the time being, economic reports are likely to be of secondary importance as compared with talks about the guidance on how the U.K. will be extricated from the EU bloc. Prime Minister David Cameron will meet EU leaders for dinner today.

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 2016 Maimar-FX.

www.maimar.co

 

 

UK Referendum Cast Its Shadows Before – Investors Are Turning To Safe Assets

Dear Traders,

We welcome you to a new trading week and it is getting more and more exciting as we are approaching the U.K. referendum next week, which will maintain its grip on the markets. The U.S. dollar appreciated against the euro and British pound last Friday as it benefited from safe-haven flows in the run-up to the U.K. vote. The British pound broke below 1.43 as anxiety about a potential Brexit considerably reduced the demand for sterling. While the Yen benefits most from safe-haven flows, the appetite for U.S. dollars mainly hinges on the Federal Reserve’s tightening cycle. Despite a busy economic calendar this week, the main focus will therefore be on the FOMC rate decision on Wednesday. No one expects the Fed to raise interest rates this month but Janet Yellen’s press conference could set the tone of the debate on further tightening in 2016. Apart from the FOMC announcement, the June 23 referendum is casting its shadows before: A survey published last Friday showed the ‘Leave’ camp being in the lead. U.K. Consumer Prices are scheduled for release on Tuesday, while the Bank of England will announce its monetary policy decision on Thursday. However, overshadowed by Brexit concerns, the BoE announcement is going to be a non-event for traders.

From the U.S. we have Advanced Retail Sales (Tuesday) and the CPI report (Thursday) scheduled for release. All in all, it could be a busy week for traders and as long as there is volatility in the markets, there will be opportunities for larger gains.

GBP/USD

The cable broke below its crucial support at 1.43 and could be headed for a test of 1.41 and 1.4050 in a next step. Looking at the daily chart we see a current downward channel which suggests further bearish momentum towards the lower bound at 1.4080. But be careful: The pound fluctuates in an oversold territory and could now be vulnerable to volatile upswings. Thus, pullbacks towards 1.4350 and 1.44 are not unlikely.

Chart_GBP_USD_Daily_snapshot13.6.16

From the Eurozone there will be no major economic reports on the calendar. Thursday’s Consumer Price report could have a minor impact on the euro but how the EUR/USD will trade this week, will mainly hinge on the performance of the greenback and safe-haven demand. The euro marked a current support at 1.1230. With a break below 1.1225 it could extend its losses towards 1.1195 but we expect bearish momentum to be limited as the currency pair could be vulnerable to some pullbacks now. We see a current resistance at 1.13/1.1320.

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 2016 Maimar-FX.

www.maimar.co