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Pound Marks Support At $1.34- But For How Long?

Dear Traders,

The U.S. dollar initially rose against the euro and British pound Monday morning but then ended the trading day virtually unchanged. Given these limited bearish movements, there wasn’t much to gain for short traders.

The cable has pushed down to a low of 1.3390 but the pair was able to stabilize above 1.34. Whether the 1.34-barrier will hold, remains to be seen but as long as GBP/USD remains below 1.35 we generally maintain a bearish stance in this pair. A significant break above 1.35 would shift the focus back to a previous sideways trading range between 1.36-1.35.

BoE Governor Carney will testify before parliament this morning at 8:15 UTC. Any new comments on inflation or monetary policy changes could get the pound moving.

The euro bounced off the 1.1715-level and corrected previous losses towards 1.18. The downtrend is still intact and as long as EUR/USD remains below 1.1850 we anticipate lower supports to come in at 1.1680 and 1.16.

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GBP/USD: Preparing For Potential Short Squeeze Scenario

Dear Traders,

After the absence of a major driver or catalyst in the markets, today is loaded with market-worthy data and thus, traders are bracing for higher volatility in most major currency pairs. Top event risk will be the Bank of England rate decision with the BoE’s Quarterly Inflation Report. While the BoE is unlikely to raise interest rates at this meeting, it is the inflation report and the press conference with BoE Governor Carney that garner most attention.

The Bank of England will announce its rate decision alongside the release of the central bank’s inflation report at 11:00 UTC. The press conference will follow 30 minutes later.

Following the complete U-turn in rate hike expectations out of the BoE, the central bank has little choice but to signal a rate hike in August to maintain the bank’s credibility. The risk is therefore tilted to the upside with a potential short squeeze scenario in the GBP/USD. If the BoE, however, disappoint in terms of rate hike speculation deviating from their hawkish bias, the pound will further fall.

Another, no less important, report will be the April Consumer Inflation Report (CPI) from the U.S., which is due shortly after the BoE’s decision at 12:30 UTC. The Federal Reserve debate over a fourth rate hike in 2018 is still ongoing, which is why inflation figures could affect current rate hike speculation. Thus, a surprise in CPI data could have a major impact on the dollar, paving the way for some profit-taking or maybe an extension of the dollar rally.

Let’s take a look at the technical picture:

GBP/USD

The cable traded consolidated between roughly 1.36 and 1.35. The short-term bias is slightly bullish, with the focus now being on an uptrend channel between 1.3615 and 1.3515.  A break above 1.3810 could open the door for accelerated bullish momentum towards 1.40. On the bottom side, the 1.35-support remains a crucial price barrier. If the pound drops below 1.3480 we may see a drift towards 1.3330.

EUR/USD: The euro still trades around the falling trendline of its recent downtrend channel. As mentioned in yesterday’s analysis, the 1.19-barrier could prove an important hurdle for euro bulls now. A break above 1.1910 may encourage bulls for a test of 1.1950. Today’s price action will, however, hinge on the appetite for USD, which is why we focus on U.S. CPI data.

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We wish you good trades and many pips!

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Nothing New From The ECB, Focus Now On U.S. GDP Numbers

Dear Traders,

The ECB meeting is behind us but we had hoped for some larger market moves yesterday with a bit more follow-through after the euro’s technical break below 1.2150. The reason why the ECB statement turned out to be less market-moving this time is obvious: The central bank made absolutely zero changes to its policy statement in comparison with the March meeting, keeping to its commitment to bond-buying at a monthly 30 billion euros until at least September with interest rates on hold “well past” then.

ECB President Draghi talked primarily about their confidence in broad-based growth and that inflation will converge towards the ECB’s target over the medium term. He refrained from discussing monetary policy and the end of asset purchases.

In sum, despite Draghi’s upbeat tone the ECB statement revealed nothing fundamentally new. The next time the ECB releases a new set of Staff Economic Projections will be in June.

The euro dropped below 1.2150 but found a lower support at 1.2095 for the time being. The EUR/USD is still in deeply oversold territory, so traders should prepare for pullbacks. We expect a current resistance-zone to come in between 1.2160-80 but given the strong bearish bias the focus shifts to a next lower target around 1.2060/50.

Yesterday’s trading in the GBP/USD was not to our liking as the pound traded choppily between 1.40 and 1.39. As for sterling bulls, the way is clear with buyers waiting for an upside break above 1.40. On the bottom side, however, sterling bears will have to wait for a break below 1.3875 in order to anticipate further losses.

We will watch the U.K. GDP numbers at 8:30 UTC which could have a major impact on the cable’s price action.

From the U.S. we have the Q1 GDP numbers scheduled for release at 12:30 UTC. The annualized growth rate is expected to register 2 percent down from 2.9 percent. If there is an upside surprise, the greenback could resume its rally and drive other major peers lower in return.

We wish you good trades for today and a nice weekend.

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 2018 Maimar-FX.

www.maimar.co

 

GBP Tests Support, What’s Next?

Dear Traders,

It came as it had to come in the GBP/USD: The British pound retreated from its highs and corrected some of its recent gains. Before yesterday’s pullback happened, we saw the pound touching a fresh post-Brexit high at 1.4377 but the U.K. employment report put an end to the cable’s rally. As we warned traders yesterday, the pullback was inevitable given the overbought situation in the GBP/USD. The job report was, however, generally positive and likely to keep the Bank of England on track to raise interest rates next month.

Today we have the U.K. Consumer Price Report scheduled for release at 8:30 UTC. If inflation numbers come in weaker than expected, the pound could drop towards 1.4230/20. A significant break below 1.4220 could even open the door for a larger decline towards 1.4150. If the pound sterling is, however, able to gain ground above 1.43, buyers may take the opportunity to buy pounds at lower levels with a higher target at 1.4420.

The euro’s climb above 1.24 had been brief while the pair EUR/USD was unable to hold above that important threshold – at least for the time being. With the 1.24-barrier being a hart nut to crack, we now focus on the 1.2350-support which is equivalent to a rising trendline of the recent uptrend channel. Euro bulls should pay attention to a break above 1.2425 which could justify accelerated bullish momentum towards higher targets.

The Eurozone Consumer Price report is scheduled for release at 9:00 UTC but as long as there is no surprise in the headline figure, the report’s impact on the price action could be limited.

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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 2018 Maimar-FX.

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Lackluster Price Development While Focus Remains On Syria

Dear Traders,

Geopolitical tensions have been on the lighter side yesterday but the situation remains fragile.

As long as the risk of military conflict between Russia and the U.S. in Syria remains high, we may see a lackluster price development in the market which provides little profitable trading opportunities. Traders should therefore maintain a cautious approach.

The euro traded with a downward tilt following relatively dovish ECB minutes. The minutes highlighted the appreciating euro as a cause of concern for the economic outlook in the Eurozone, as well as the risk of trade conflicts. While we anticipated short-term bullish sets after a test of either 1.23 or 1.2250, the price action in the EUR/USD remains more or less range bound despite the primary bullish trend.

Technically speaking, we now expect the euro to trade between 1.2380 and 1.2250. If the euro drops below 1.2280 it could be headed for a test of 1.2250/20. Whether we will see some more volatile (and hopefully more profitable) market movements in the Forex market will depend on the market’s risk appetite for currencies.

The pound sterling caught a bid and rose back above 1.42 following a test of the potential support level at 1.4145. We now expect the GBP/USD to trade within an upward trend channel between 1.43 and 1.4190.

The only piece of economic data today will be the release of the University of Michigan Sentiment at 14:00 UTC.

With the focus being on news on Syria, traders should stay alert to possible changes in sentiment but as long as the risk appetite among investors is low, trading might be quiet.

We wish you a nice and peaceful weekend.

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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 2018 Maimar-FX.

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Trade War Has Begun

Dear Traders,

Yesterday was the official start of a trade war with the Trump administration announcing a at least $50 billion tariff on Chinese imports. And that decision had a reciprocal effect. Subsequently, China announced plans for tariffs on $3 billion of imports from the U.S., including products from steel to pork.

Investors now fear an escalation in trade tensions between the U.S. and China while an escalation in trade wars could hurt global growth.

The Japanese yen served as a safe haven while the U.S. dollar’s fate is still uncertain amidst an uncertain geopolitical environment.

The British pound’s reaction to the Bank of England announcement was strong but short-lived. The BoE rate decision was a bit more hawkish than expected, increasing the odds for a next rate in May to 72 percent now. The pound soared to a high of 1.4220 but quickly deviated from its highs as market participants took profit at 1.42. We still see the pound trading within an uptrend channel which is why we expect further gains towards 1.4270. As mentioned in yesterday’s analysis, the current support around 1.4070 proved intact from where some buyers have shown up. For the bias to shift from bullish to bearish it would require a sustained break below 1.40.

The euro bounced off the falling trendline and tested the 1.23/1.2280 support area. If the euro climbs back above 1.2370 we expect further gains towards 1.24. A break above 1.2415 would shift the bias in favor of the bulls.

Traders will watch U.S. Durable Goods Orders today at 12:30 UTC.

It has been a very profitable trading week and we therefore advise traders to secure their weekly profit now.

Enjoy the weekend.

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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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Currency Pairs Remain Range-Bound Ahead Of Next Week’s Central Bank Meetings

Dear Traders,

The euro and pound were unable to hold onto their recent gains and weakened against the U.S. dollar Thursday despite political turmoil in the Trump administration. The euro tested the 1.23-threshold but was able to stabilize above that barrier – at least for the time being. Short traders were able to pocket a good profit yesterday as we entered short as soon as the euro dropped below 1.2350.

The pound sterling still rejects 1.40 and thus, remains range-bound between 1.40 and 1.39. As long as there is no sustained break above or below that range, there is nothing new to report.

This Friday we do not have great expectations as the focus turns to the central bank meetings next week so market movements could be flat ahead of the upcoming risk events.

Traders may keep an eye on the Eurozone Consumer Price Index at 10:00 UTC and the University of Michigan Sentiment at 14:00 UTC. However, none of these reports is expected to have a significant impact on the currencies.

We wish you a beautiful weekend!

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.

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U.S. CPI Data In Focus Today

Dear Traders,

The British pound ended the trading day in positive territory after news emerged that a Brexit transition deal could be announced in the coming days. The transition deal would give the U.K. two years beyond the March 2019 exit to implement new laws and regulations outside the EU bloc.

Sterling traders should keep an eye on the U.K. Spring Budget statement today at 11:30 UTC. U.K. Chancellor Philip Hammond is likely to reveal an improvement in U.K. public finances. An upbeat tone could therefore spur bullish momentum in the GBP/USD.

Today, the U.S. Consumer Price Index is due at 12:30 UTC and this inflation indicator could shift Fed rate forecasts. A March 21 rate hike is almost certain but the focus will be on the debate between 3 and 4 hikes throughout this year. How the dollar will trade within the next hours could therefore hinge on today’s inflation numbers.

The euro ended the trading day virtually unchanged against the dollar while profitable trading opportunities were absent. As long as the euro remains above 1.23 we see the chances in favor of the bulls.

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 2018 Maimar-FX.

www.maimar.co

 

 

 

GBP/USD: Prepare For Higher Volatility Around May Speech

Dear Traders,

Thursday has been a challenging trading day for traders of the EUR/USD and GBP/USD as the U.S. dollar suddenly u-turned after U.S. President Donald Trump promised to impose tariffs on steel and aluminum imports. The dollar significantly depreciated against the euro after the EU said that it will “react firmly to Trump’s tariffs”. Trump’s announcement has brought to the fore the next escalation in trade wars which could be a permanent downgrade for the greenback. Hawkish rhetoric from New York President Dudley took a backseat to fears of a trade war.

Neither major currency pair provided a sustained profit yesterday while we had to struggle with false breakouts and choppy swings. However, we hope for more profitable trading conditions today while the focus will be on the British pound.

GBP/USD

The pound tumbled after U.K. Prime Minister Theresa May rejected the EU’s Brexit draft Wednesday and now the market is waiting for more clarity on the U.K.’s demands of late. Theresa May is delivering the sixth and final “Road to Brexit” speech today, detailing the Government’s plans for the U.K. outside the EU. The time for May’s speech has yet to be scheduled.

We expect higher volatility in the GBP/USD but advise caution as the pound is known for its exaggerated volatile swings.

We wish you good trades and a wonderful weekend.

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 2018 Maimar-FX.

www.maimar.co