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Will The Euro Rise Or Fall? Waiting For Draghi

Dear Traders,

It’s decision day at the European Central Bank and traders are eagerly awaiting ECB President Draghi’s comments. Today’s ECB meeting is a very important event as it is expected to provide clarity on the withdrawal of stimulus. The majority of analysts expect Mario Draghi to delay announcing a timetable for cutting its monthly bond purchases at this meeting. The reason is the strength of the euro which may prevent the central bank from announcing a big change in monetary policy. Moreover, improving economic conditions in the Eurozone are likely to balance out near-term concerns over the euro’s strength. Ongoing EU improvements thus give room for the ECB to forego an announcement of a QE taper. If the ECB downplays tapering, the euro could fall. In the bullish case of a surprise announcement particularly a reduction of 30 billion or more, the euro will further rise. Whatever the case, the central bank has little choice but to cut asset purchases by next year, simply because it has no more bonds to purchase. In a first step, the ECB could reduce its monthly purchases to 40 billion from 60 billion which could happen at the start of 2018.

It all depends on Draghi’s rhetoric but even in the case of a dovish announcement, the medium-term trend is towards euro strength.

The U.S. dollar, in contrast, has become incredibly oversold. So any disappointments on the Eurozone front would be sufficient to trigger a correction in the EUR/USD, even though a setback may not last very long. Let’s be surprised.

The European Central Bank decision is scheduled for 11:45 UTC, followed by the highly anticipated ECB press conference 45 minutes later.

The euro traded virtually unchanged against the U.S. dollar while the price action of the EUR/USD was limited to a tight range between 1.1950 and 1.1910. We are still waiting for breakouts of that narrow range and prepare for larger swings today. Above 1.1960 the euro could head for 1.2120. Below 1.1890 it could fall back towards 1.18 and possibly even 1.17.

We wish you good trades!

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

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

Dollar Weakness Continues

Dear Traders,

The greenback continued to weaken against the euro and British pound. While the euro was Thursday’s best performer, rising towards 1.0680 and providing euro bulls a good profit, there was less consistency in the performance of the pound sterling. The pound traded sideways after peaking at 1.2524 and buyers had to be content with a modest profit. U.K. Retail Sales are due for release at 9:30 UTC but this report is not expected to have a significant impact on the pound.

Apart from the second-tier U.K. Retail Sales report, there are no major economic reports scheduled for release today and thus, the price action might be oriented towards resistance- and support levels. Let’s have a look at the current important price levels:

  Resistances Supports
EUR/USD 1.0705

1.0750

1.0775

1.0630

1.06

1.0550

 

  Resistances Supports
GBP/USD 1.2550

1.26

1.2675

1.2440

1.2410

1.2330

We wish you a relaxing weekend.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

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

 

 

 

Profitable Trading Week

Dear Traders,

In brief, we got what we were looking for: The ECB delivered a surprise which was initially misinterpreted and we realized a good profit from trading both bullish and bearish breakouts in the EUR/USD.

Let’s quickly analyze what had happened: When the ECB announced that they will wind down quantitative easing from 80 billion euro to 60 billion euro in April 2017, market participants wrongly interpreted the reduced amount as a taper. The euro therefore soared beyond 1.0830 as a first response but quickly retreated from its high at 1.0874 after the market realized that the ultimate stock of ECB bonds instead will be higher. While economists had been looking for asset purchases to continue six months beyond the previous end date, ECB policy makers added another three months of purchasing, boosting its balance sheet to 540 billion euros instead of 480 billion euros. Moreover, ECB president Mario Draghi insisted “that there is no tapering in sight”. This was finally reason enough to sell the euro below 1.07.

In a nutshell, the ECB may have bought some time and nine months of keeping their options open, but looking at the future, cutting to 60 billion euro per month could be a staging post to further cuts and thus, effectively tapering.

Whatever the case, we are looking back at a very profitable trading week, specifically in the EUR/USD. On balance, this week alone we generated a profit of 166 pips by our daily signal alerts and a great gain of 250 pips by our swing signals for the euro. We will therefore not invest our weekly profits today.

Have a wonderful weekend and trade well!

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

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

 

 

 

Euro On A Rollercoaster While Pound Continues To Weaken

Dear Traders,

The broad-based strength of the U.S. dollar drove the activities in the currency market and allowed for adequate profits for sterling and euro bears. The British pound was hit hard by Brexit concerns on the one hand and dollar strength on the other. As a result, the cable fell to a 31-year low against the greenback and traders prepare for further losses in the GBP/USD. While the pound is expected to depreciate further ahead of Britain’s planned exit from the EU, investors believe that a weaker currency will help to boost British exports, making larger U.K. companies more competitive.

Technically, we expect the 1.27-level to lend a short-term support to the pound before we may see further losses. In case that the 1.27-mark withstands the downward pressure, we anticipate a correction toward the 1.28-level.

The euro was accompanied by higher volatility on Tuesday and losses in the EUR/USD were soon erased after a report said that the European Central Bank will probably taper bond purchases before the conclusion of quantitative easing. The euro overreacted on that hawkish statement and jumped towards 1.1250. Nevertheless, the technical picture has not changed materially as the euro is still confined to its tight trading range between 1.1240 and 1.1140. Above 1.1240 we may see a renewed test of 1.1270 while a current support is still seen around the 1.1130-level.

Today, we have some interesting economic data scheduled for release, influencing the price development of both major currency pairs:

8:30 UK Services PMI

9:00 EUR Euro-zone Retail Sales

12:15 USA ADP Employment Change

14:00 USA ISM Non-Manufacturing Composite

(Time Zone UTC)

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

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