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Can The Euro Hold Onto Its High Price Level?

Dear Traders,

The euro broke above Monday’s spike high at 1.0923 but gains were capped at 1.0950, at least for the time being. The question now is whether there is still room for further gains. Looking at the 4-hour and daily chart we see that the EUR/USD is in overbought territory, a situation that increases the likelihood of upcoming corrections. We see a next hurdle at around 1.0970 followed by a stronger resistance at 1.10. As long as the euro remains firmly below 1.10 we prepare for corrective movements towards 1.09, 1.0840 and possibly even 1.0750.

The British pound rose towards the upper bound of its recent sideways trading range but still refrained from an upside break above 1.2850. As noted in previous analysis, sterling bulls better wait for a significant break above 1.2860 in order to buy pounds towards 1.30. A break below 1.2730 however, could send the pound tumbling towards 1.2650.

There are no major economic reports scheduled for release today, so the price action could hinge on U.S. President Trump’s tax-reform speech. Trump is expected to unveil a tax plan that includes a cut of the corporate rate to 15 percent from 35 percent. If he delivers we could see some renewed strength in the U.S. dollar.

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Market Returned To Risk-Off Mode

Dear Traders,

Risk appetite among market participants has subsided following the risk-on rally in the wake of French elections. While we had hoped for some further momentum in the markets, traders were disappointed by the poor market situation and consequently none of our daily signal entries was triggered. We may see some increase in volatility as soon as tomorrow as investors are turning their attention to U.S. President Trump who will unveil his tax plan on Wednesday. According to a White House official, he will call for cutting taxes for individuals and lowering the corporate rate to 15 percent. Trump’s announcement could strengthen the U.S. dollar.

The euro traded sideways within a tight trading range between 1.0880 and 1.0835. We are now looking for small breakouts either above 1.0880 or below 1.0845. However, with market participants pulling back on EUR/USD positioning we have no other choice than waiting for the market sentiment to improve.

The British pound refrained from showing any larger price fluctuations and remained steady above 1.2770, at least for the time being. A current support level is seen at 1.2745 whereas a short-term resistance remains intact at 1.2830/40.

U.S. Consumer Confidence is scheduled for release at 14:00 UTC and is the only noteworthy report today.

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Euro Steady Ahead Of French Elections – The Calm Before The Storm?

Dear Traders,

Both euro and British pound ended yesterday’s trading day virtually unchanged against the U.S. dollar after the euro had risen to a high of 1.0777 whereas the cable had rejected the 1.2850-resistance. The limited upward movement was due to a slight increase in the dollar after U.S. Treasury Secretary Steven Mnuchin spread optimism that the Trump administration is close to bringing forward major tax reform. He said the White House will unveil a tax plan “very soon”.

Meanwhile, the euro held steady above 1.07 after a police officer was killed in Paris just days before France’s presidential election starts. The incident could have an impact on the outcome of the first round of the election on Sunday since the Islamic State is claiming responsibility for the attack.

Polling is suggesting it will be a close call between independent Emmanuel Macron and the National Front’s Marine Le Pen. The two leading candidates will run off in a winner-takes-all contest on May 7.

EUR/USD- The calm before the storm?

The euro performed quite resiliently ahead of the most tightly contested elections in France.

On a technical basis, we will focus on a current trading range between 1.0740 and 1.0680. A renewed break above 1.0740 may boost bullish momentum until a fresh high at 1.08. We would speak of a bullish breakout in case the euro climbs above 1.0820. A higher target could be at 1.0950. However, below 1.0680/70 we could see the euro tumbling towards 1.0640 and 1.06. A break below 1.0590 could reinvigorate fresh bearish momentum.

The British pound was unable to take the hurdle at 1.2850 and dropped back below 1.28. As long as the GBP/USD remains trading between 1.2860 and 1.2770 we do not pay much attention to the cable’s price action. A break below 1.2770 would shift the focus to lower targets near 1.27 and 1.26 whereas it would need a sustained break above 1.2860 to spark bullish momentum towards 1.2950.

The U.K. Retail Sales report is scheduled for release at 8:30 UTC and will draw traders’ attention.

We wish you good trades and a nice weekend.

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Copyright © All Rights Reserved 2017 Maimar-FX.

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Euro And Cable Consolidate Following Strong Moves

Dear Traders,

The British pound gave up some of the gains it had made on Tuesday and fell back below 1.28. As long as the pound remains above the 1.26-mark, the recent drop could be considered a correction within the recent uptrend. We will now focus on a break above the short-term resistance at 1.2860. Once that level has been breached to the upside, sterling could make a run for 1.2950. A short-term support could however be at 1.2750 and 1.2720.

Bank of England Governor Mark Carney is scheduled to speak at an event in Washington today at 17:30 UTC and his comments could have an impact on the pound, provided that he refers to the BoE’s monetary policy.

The euro held above the 1.07-level and market participants seem to be shying away from taking any positions in the EUR/USD ahead of France’s presidential election this weekend. From a technical perspective, we see a symmetrical triangle in the 4-hour chart which could predict small breakouts.

Above 1.0720 the euro could rise towards 1.0760, whereas a break below 1.07 may send the euro towards 1.0675. However, given the risk aversion in the market we do not expect larger fluctuations within the next 48 hours.

 

From the U.S., we have the Philadelphia Fed Index due for release at 12:30 UTC but we doubt that this report will have a major impact on the greenback.

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U.S. Dollar Slides On Trump But Technical Picture Has Not Yet Changed

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Sluggish Market Environment Continues

Dear Traders,

Euro and sterling traders had no reason for rejoicing, even though we saw a slight increase in volatility on Wednesday. Yet there were no breakouts in both major currency pairs and while the cable rose to a high of 1.25, the currency pair was unable to overcome that hurdle, at least until now. The euro – how could it be different – remained sideways between 1.07 and 1.0630. With elections looming in France, investors are risk-averse and refrain from making any new investments in the euro until the political situation becomes more stable. This explains the moderate price development.

The FOMC minutes did little to alter the market’s view on the Fed’s 3-hike total policy outlook in 2017. While minutes restated an optimistic outlook for the U.S. economy, the discussion on shrinking the U.S. central bank’s balance sheet later this year drew most attention. There is speculation that the balance-sheet reduction could damp the need for further tightening from the Fed. The U.S. dollar weakened in response to the Fed’s comments on its balance sheet policy.

From a technical view, there is nothing new to report. We are still waiting for sustained breakouts in both EUR/USD and GBP/USD. With no fresh impetus to the market we expect the cable to remain between 1.2520 and 1.2430, whereas trading the euro only becomes interesting if the pair breaks above 1.07 or below 1.06.

Apart from a speech of ECB president Mario Draghi in the morning at 7:00 UTC, the U.S.-China summit will be of high importance.

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Will Payrolls Inject Momentum To The Sluggish Market?

Dear Traders,

Overall, yesterday’s trading was not to our liking with the euro remaining confined to its three-week range between 1.0640 – 1.05 and the cable trading choppily in between our daily entry levels. In a nutshell, there was more to lose than to win from an unsteady market environment.

The euro benefited from a positive assessment of the euro-area economy while the ECB’s monetary policy stance has not fundamentally changed. The ECB statement came in as expected while Mario Draghi said downside risks to the euro zone economy were less pronounced. Even if the next change from the ECB will be towards removing accommodation and not adding stimulus, it is still too early for a shift in monetary policy.

The EUR/USD rose to a high of 1.0615 and that was it. The price development remained relatively moderate and major market moves are still lacking. The short-term bias has slightly changed in favor of the bulls but it is the appetite for U.S. dollars that will dictate the price action and thus, traders are eagerly waiting for the March Non-farm Payrolls to determine direction.

The GBP/USD was moving sideways between 1.2195 and 1.2135. Unfortunately, our entries were placed on top and below that sideways trading range. Therefore we have been struggling with false breakouts. U.K. Industrial production is due for release at 9:30 UTC but this report will take a backseat to the highly anticipated NFP report.

Today’s U.S. jobs report is the last top event risk before the Fed meeting next week. A healthy report is widely expected but the expectations are very high. Hence, there is a risk of disappointment, which would carry a higher impact than an upbeat report.

We wish you good trades and a beautiful weekend.

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Quiet Trading

Dear Traders,

The euro’s short-lived break above 1.0630 proved unsuccessful after euro bulls got fooled by the false breakout. It may require another test of that resistance level to finally invigorate further bullish momentum but the price action will also hinge on the appetite for U.S. dollars ahead of Friday’s payrolls report. However, from a technical perspective, nothing has changed and we still wait for prices either above 1.0630/40 or, on the other side, below 1.0490.

The pound sterling depreciated against the U.S. dollar but held steady above its 1.22-support. In short-term time frames, we now wait for a renewed break below 1.2230 in order to sell sterling towards 1.2190.  On the topside we anticipate the 1.2285-level to act as a current resistance. For the pound to rally, it would need to significantly break through the 1.23-level.

There are no major important economic reports scheduled for release today, so trading could be quiet again with market participants remaining risk-averse until the end of the week.

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We wish you good trades and many pips!

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Trump Speech Leaves Investors Unimpressed

Dear Traders,

Well, as a trader, we were expecting much more from Donald Trump’s address to Congress. The market reaction to Trump’s speech was muted as specific details on infrastructure have been elusive. Trump promised to spend as much as 1 trillion dollars on infrastructure but he did not specify the timing and what spending he is referring to. While there were no details, Trump’s speech was notably less confrontational than his inaugural address. The U.S. dollar slightly strengthened following the speech but large market movements are still yet to come.

The pound sterling dropped below 1.2380 and we now expect the GBP/USD to trend lower towards 1.2260/20. The pound will now need to break below 1.2340 but before we could see accelerating bearish momentum it may head back towards a test of the current resistance at around 1.2430.

The U.K. PMI Manufacturing is scheduled for release at 9:30 UTC and could have a minor impact on the pound.

The euro depreciated against the greenback after failing to break above 1.0630. We will now wait for a sustained break below 1.0520 before anticipating further losses. Below 1.0520 we could see the EUR/USD tumbling towards 1.0450. On the upside we expect the 1.0620-level to lend a current resistance to the currency pair.

From the Eurozone, we have the German Unemployment report scheduled for release today at 8:55 UTC followed by the German Consumer Price Index at 13:00 UTC.

The most interesting piece of U.S. economic data will be the ISM Manufacturing Index due at 15:00 UTC which could have a significant impact on the dollar, provided that there is a surprise.

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 2017 Maimar-FX.

www.maimar.co