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Rate-Rise Expectations Unchanged After Disappointing Payrolls

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Dear Traders,

Market participants were left relatively unimpressed by Friday’s weaker-than-expected U.S. jobs report, which showed the smallest jobs gain in seven months. Although earnings growth came in with an uptick it was not enough to change investors’ expectations of gradual monetary policy tightening. The market’s rate-rise expectations therefore remained unchanged and traders see an even chance of a Fed rate hike this year and only an eight perecent probability of a June hike.

As expected, the euro’s price action remained confined within a narrow trading range between 1.1480 and 1.1380 on the back of an unspectacular payrolls report. The British pound finally decided to drift lower after touching a high of 1.4546 on Friday. We still expect GBP/USD to test the 1.4330/15-level, before we may see a pullback towards 1.4550. A short-term resistance is seen at 1.4465, whereas sterling must now break below 1.44 in order to revive fresh bearish momentum.

This week’s calendar is relatively light in terms of market moving data. Only towards the end of the week we have major important reports scheduled for release. The most important event for sterling traders will be the Quarterly Inflation Report, scheduled for release on Thursday. The Bank of England will publish new forecasts in its inflation report, alongside its interest-rate decision. BoE governor Mark Carney is set to give a press conference on the economic outlook following the release of the inflation report.

The most important piece of economic data from the Eurozone will be GDP reports scheduled for release on Friday. From the U.S., Advance Retail Sales, also due on Friday will be important to watch.

We wish you a good start to the new week and many profitable trades.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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UP Or DOWN For The USD?

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Dear Traders,

Today is going to be an historic day, as the Federal Reserve is expected to normalize monetary policy and end seven years of near-zero interest rates. The following guidance is expected to be dovish, implementing less than three increases of 0.25 percentage points in 2016. Market participants will turn their focus to the FOMC Press Conference, led by Fed Chair Janet Yellen. It might be a communicative challenge for Ms. Yellen, as the Fed neither want to cause turbulence with any hawkish comments nor want to lose their credibility. Anything can happen today, so traders should prepare for big moves in either side. If Yellen signals a clear guidance regarding the Fed’s tightening cycle, the USD could rally. However, the risk is to the downside for the greenback, as any cautious comments could trigger a sharp selloff.

The U.S. dollar advanced against its major peers going into the Fed’s decision. The British pound dropped like a stone on the Bank of England’s dovish monetary policy outlook. BoE Governor Carney said in an interview that economic conditions for a U.K. rate hike are not yet in place. The U.K. central bank has signaled it is in no rush to follow the Fed which is forecast to begin policy tightening.

The U.K. Employment Report is scheduled for release today at 9:30 GMT and the focus will be on Average Weekly Earnings. If wage growth comes in softer than expected, sterling could be vulnerable to further losses.

Eurozone Consumer Prices are due for release at 10:00 GMT, but as long as data meets expectations, the impact on the euro could be limited.

The Federal Reserve decides on monetary policy at 19:00 GMT, followed by the press conference at 19:30 GMT.

Let’s have a look at the technical side:

EUR/USD

Looking at the daily chart, we see the pair still trading within a downward channel. Depending upon the Fed speak, we see some chances that dollar bulls may drive the EUR/USD to lower levels. Lower targets could be at 1.0840 and 1.08. In case the pair falls significantly below 1.0780, the focus turns to 1.0690 and 1.0635. The support line is at 1.0450 but an unambiguously hawkish statement would be needed in order to send the pair towards such levels.

A bullish scenario could gain attraction with prices above 1.11.A sustained break above this key resistance could lead the EUR/USD towards 1.13.

Chart_EUR_USD_Daily_snapshot16.12.15

GBP/USD

We see an upward channel within a primary downward channel. While the primary trend is downwards, the pound sterling formatted a recent upward channel, which is still intact this morning. If GBP breaks below 1.5020 and further 1.50, we expect the pair to decline towards lower targets at 1.49 and 1.4850. Based on the recent upward channel, it is also possible that sterling rebounds, heading for 1.5130 and 1.5290.

Chart_GBP_USD_Daily_snapshot16.12.15

 

Everything will depend on the Fed. So,we will wait and see. We wish all traders profitable trades for 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 2015 Maimar-FX.

www.maimar.co

 

 

 

Fed delays Rate Hike – No appetite for U.S. dollars

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Dear Traders,

The Federal Reserve delayed its rate hike and left interest rates unchanged. Reasons for the Fed’s decision were recent global economic and financial developments which may put further downward pressure on inflation in the near term. Nevertheless, the committee’s outlook has not changed and they repeated to raise rates when they see further improvement in the labor market and stronger inflation.

The question of whether the Fed’s move was right or wrong continues to be controversial.

Those who have hoped for a rate hike were disappointed and sold U.S. dollar as an initial reaction to the decision. We went long and gained a nice profit of 100 pips in the EUR/USD and 91 pips in the GBP/USD. So all in all a profitable trading day even though we had to record some losing trades during the day, but with the right risk-management these losses have been less serious.

There are no important economic reports scheduled for release today. It could therefore be a quiet trading day.

We wish you a beautiful weekend!

Daily Forex signals:

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

Subscribe to our daily signal service https://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 2015 Maimar-FX.

www.maimar.co

 

 

 

Market is pricing in a Fed Hike Delay

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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  

Daily Forex signals:

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

Subscribe to our daily signal service https://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 2015 Maimar-FX.

www.maimar.co