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BoE Super Thursday To Provide Trading Opportunity For Sterling Traders

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Dear Traders,

It’s Super Thursday at the Bank of England, which means we get a rate decision along with the Quarterly Inflation Report and comments from BoE Governor Mark Carney. Today’s meeting is the most important event this week and sterling traders prepare for volatile swings around the monetary policy announcement. The big question among market participants is how hawkish the BoE might be towards the end of this year. The market is fully pricing in a rate increase at the BoE’s Super Thursday in November while market participants see a 50/50 chance of an earlier rate hike in May. If evidence points to a rate rise in May, the pound will rally and may find its way back to 1.42. However, if the tone in today’s statement is not as hawkish as traders are hoping, the pound will fall.

The focus will also be on the inflation report and if economic growth and inflation forecasts are revised higher, GBP/USD could recover some of its recent losses.

There is also the possibility of a muted response following today’s statement. Brexit risks continue to cause uncertainty about the outlook and if those risks have not changed substantially, the market’s reaction to the statement could be muted.

We will know more today at 12:00 UTC.

GBP/USD: The cable found some support around 1.3850 and if this barrier is breached to the downside we expect further losses towards 1.3750. For bullish momentum to accelerate, it would however need a sustained break above 1.40.

EUR/USD: The euro broke out of its recent sideways trend channel and fell towards 1.2240. The break below 1.23 came despite Angela Merkel’s deal with the SPD to form a great coalition in Germany. Technically speaking, the chances are now in favor of further downside potential driving the pair towards 1.2220 and 1.2170. If the euro rises back above 1.2350, bulls may take over control.

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FX Market Less Influenced By Equity Selloff And Subsequent Rebound

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Dear Traders,

The Forex market was less influenced by the selloff in equities at the beginning of this week. While the recent crash and subsequent recovery in equities have sparked a wave of volatility in global markets, the moves in forex have been more conservative.

The EUR/USD remained resilient and ended the trading day virtually unchanged after bouncing off near the 1.2310/00-support level. As long as the euro trades between 1.25 and 1.23 there is nothing new to report.

The GBP/USD dropped amid heightened volatility towards 1.3830 from where a relief rally started, erasing earlier losses with a rebound towards 1.40. At the end of the day, the pound ended the trading unchanged against the dollar. Traders should now prepare for larger swings with Brexit talks and Super Thursday looming.

GBP/USD

Looking at the daily chart we see that bearish momentum is fading after the pound stopped its fall above 1.3830. While we expected lower targets to be at 1.3830 and 1.38, we now prepare for potential pullbacks. If the pound climbs back above 1.40 and is able to stabilize above that threshold, we anticipate further bullish momentum towards 1.42 and possibly even a break above 1.43. That bullish scenario is however not a foregone conclusion as sellers may re-emerge.

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

 

 

 

Traders Prepare For Volatile Swings This Week

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Dear Traders,

We welcome you to a new trading week. Financial markets are dominated by uncertainty surrounding Donald Trump’s administration, prompting large investors to adopt a wait-and-see stance. The U.S. dollar came under further pressure after Trump’s order halting some immigration, causing geopolitical tensions. Risk aversion has therefore led to a recent sideways trend with both major currency pairs trading in relatively narrow trading ranges. This phase of trendless and uncertain markets makes it difficult for day traders to benefit from limited fluctuations and the lack of price breakouts.

This week’s major event risks might bring some new momentum to the markets and trigger profitable breakouts. The economic calendar is very busy in terms of market moving data and traders await high volatility throughout the entire week. The week starts off with the German Consumer Price report, scheduled for release today at 13:00 UTC which could lend a support to the euro. On Tuesday, the Eurozone Consumer Price report will be important to watch while an upbeat report could lead to speculation that the European Central Bank might start to reduce its asset purchases in the near future. With regard to top-tier U.S. economic data, the FOMC rate decision and the Non-Farm Payrolls report (Friday) will take center stage this week. The FOMC committee will deliver an update on its policy stance on Wednesday and while the FOMC statement is expected to be relatively upbeat, the fiscal policy uncertainty may frustrate the greenback’s recovery.

For sterling traders, the most interesting event will be the Bank of England‘s ‘Super Thursday‘ which may shape expectations for the near-term outlook for sterling. The BoE releases its Quarterly Inflation Report alongside its monthly monetary policy decision. If BoE policymakers show greater willingness to drop their dovish tone and gradually move away from their easing cycle, the pound could be vulnerable to further gains, heading for a test of 1.2780/90.

Important data for today:

13:00 EUR German CPI data

13:30 USA PCE Report

15:00 USA Pending Home Sales

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/

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 2017 Maimar-FX.

www.maimar.co