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More To Lose Than To Gain Amid Liquidity Drain

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Dear Traders,

With many U.S. market participants being on holiday for a long weekend, there was not much consistency in the performance of the U.S. dollar and given the unsteady fluctuation there was more to lose than to gain. With liquidity running short we recommend traders not investing much or doing a trading break until market liquidity stabilizes next week.

The euro was little changed and refrained from trading any higher than 1.0585. On the downside, it marked a fresh low at 1.0518 which was much to the displeasure of short traders as our short entry was triggered and quickly stopped out. We expect the euro to trade between 1.0610 and 1.0540 today whereas a break above 1.0615 may drive the euro higher towards 1.0640 or even 1.0660. Below 1.0540 we see chances of accelerated bearish momentum towards 1.05 and 1.0480.

The trading range in the GBP/USD narrowed and breakouts are becoming more likely in the near-term. Sterling traders should keep an eye on the U.K. GDP report scheduled for release at 9:30 UTC. Any surprises may boost the price action in the cable.

As the US rests we do not expect big market movements but nonetheless the U.S. Advance Goods Trade Balance due at 13:30 UTC might be worth watching.

Have a beautiful and relaxing weekend.

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Will U.K. GDP Numbers Drive The Pound To 1.21?

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Dear Traders,

The U.S. dollar weakened slightly against the euro and British pound Wednesday. After peaking at a daily high of 1.0946 the euro, however, shied away from its resistance at 1.0950 and dropped back below 1.09. If the EUR/USD remains unable to take the hurdle at 1.0950 we expect further losses towards 1.08. In case of a rise above 1.0965 it may head for a test of 1.10. The greenback will be back in focus within the next 48 hours with Durable Goods Orders scheduled for release today at 12:30 UTC and Gross Domestic Product data due tomorrow. GDP data and the nonfarm payrolls report next week will offer further clues on the health of the U.S. economy.

The pound sterling still remained within its current trading range between 1.2250 and 1.2150. Above 1.2250 it may head for a test of 1.2320 but be careful, the risks are currently rather still geared to the downside and it only takes one negative impulse to reinvigorate fresh bearish momentum in the GBP/USD. This impulse might come from important U.K. data such as today’s Gross Domestic Product figures, due at 8:30 UTC. If GDP numbers come in below expectations we could see sterling tumbling towards 1.2150 and further 1.21. Below .2130 we are looking for a steeper fall towards 1.20.

chart_gbp_usd_4hours_snapshot27-10-16

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Pound Takes Breather While The Euro Stabilizes Around 1.1050

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Dear Traders,

While the British pound extended its record selloff in the aftermath of last week’s vote, the euro traded sideways Monday, straining the nerves of breakout-traders as price movements were limited to either side. The euro gained some ground above the 1.0970-level, but this does not necessarily mean that bearish momentum has already been exhausted. If the euro breaks again below 1.10 we see chances of a renewed downslide towards 1.0950 and 1.09. On the other hand, if the euro climbs above 1.1085 a next crucial resistance level is seen at 1.1133. The euro would need to break that level significantly in order to invigorate fresh bullish momentum.

Chart_EUR_USD_4 Hours_snapshot28.6.16

The pound sterling tagged a fresh low at 1.3120 from where it started a relief rally. The focus will now shift to the 1.3475-resistance and in case sterling is able to take this hurdle, we could see a rally towards 1.37 and 1.3780. However, if GBP remains below 1.3360 we favor a bearish stance with a next lower target at 1.3050.

From the U.S. we have revisions to first-quarter GDP scheduled for release at 12:30 UTC followed by Consumer Confidence at 14:00 UTC. Theses reports may have an impact on the greenback but for the time being, economic reports are likely to be of secondary importance as compared with talks about the guidance on how the U.K. will be extricated from the EU bloc. Prime Minister David Cameron will meet EU leaders for dinner today.

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Dollar Rally Pauses, GBP In Overbought Territory, What’s Next?

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Dear Traders,

The British pound extended its gains versus the U.S. dollar Wednesday. The GBP/USD remained stable around the 1.47-level and we are now looking for an upside break above 1.4730 in order to buy the pound towards 1.4750 and 1.4770. Caution is advised here, however: The GBP/USD is going to trade within overbought territory now and traders should expect some setbacks towards 1.4650 and 1.4610.

U.K. GDP figures are scheduled for release at 8:30 UTC but no changes are expected.

The dollar rally paused yesterday and as a result, the EUR/USD was not moving much. We generally expect the dollar rally to continue and any upside movements in this currency pair could therefore be limited until 1.1230 and 1.1280. Short-traders should rather wait for a renewed break below 1.1145 in order to sell the euro towards lower targets at 1.1120 and 1.1070.

The most important piece of U.S. data will be Durable Goods Orders, due at 12:30 UTC. If data disappoints, the dollar could lose further ground versus its major peers. Last but not least, U.S. Pending Home Sales are scheduled for release at 14:00 UTC. Figures of both reports are expected to be weak, which could weigh on the USD in the short-term.

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Bearish Momentum Faded – Time For Corrections?

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Dear Traders,

While the British pound continued its slide against the U.S. dollar Wednesday, the euro quickly recovered its losses after the U.S. services PMI showed contraction, raising concerns about the resilience of the U.S. economy. The euro initially fell to a low of 1.0957 but was later able to stabilize above the 1.10-mark. We consider the 1.1050-area as a current resistance for the EUR/USD, whereas downside movements could be extended toward 1.0930.

EUR/USD

The euro is still trading within a short-term downward channel. With a sustained break above 1.1070/80 we might see the pair rallying toward 1.1140. However, bearish movements could be limited until the descending trend line, which is currently at around 1.0930.

Chart_EUR_USD_4Hours_snapshot25.2.16

From the eurozone we have Consumer Prices scheduled for release at 10:00 GMT but no changes are expected.

The pound has gained some ground against the greenback and was able to remain above 1.39. Upside movements could be capped at 1.40 and 1.4050 whereas a break below 1.39 could drive the cable towards lower levels at 1.3850.

U.K. Gross Domestic Product figures are scheduled for release at 9:30 GMT, but as long as numbers are consistent with the expectations the impact on the GBP should be limited.

The most important piece from the U.S. will be Durable Goods Orders, due for release at 13:30 GMT. Data is expected to show an improvement, which could add strength to the dollar in the short-term.

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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 2016 Maimar-FX.

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Fed May Shift Towards Slower Pace Of Interest-Rate Hikes

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Dear Traders,

In the end the market reaction to the FOMC statement was muted and has left much do be desired for currency traders. While the statement was a communications challenge for the Federal Reserve it came in as balanced as possible. Particularly noteworthy is the shift into a wait-and-see mode, which signals a less-hawkish forward guidance. While an interest rate hike at the next FOMC meeting in March is less likely Fed policy makers have left the door open for a March. Officials said that rate increases will depend on how the U.S. economy performs and said that they were “closely monitoring global and financial developments”.

In a nutshell, the Fed may be inclined to move forward at a slower pace of interest-rate hikes but the main focus remains on labor market and inflation data.

The EUR/USD did not show much movement yesterday, trading firmly around the 1.09-mark. For the time being, we expect swings to be muted unless the euro breaks above 1.0960 or vice versa, breaks below 1.08 and 1.0770. Upwards movements could be capped at 1.0925 and 1.0955 while downward swings may be limited until 1.0870 and 1.0820 in the short-term.

The German Consumer Price Index is scheduled for release at 13:00 GMT, a report which could affect the price action in the EUR/USD.

The British pound continued to trade lower against the greenback. We generally favor a bearish stance in GBP/USD and our focus is on the 1.42-barrier. A renewed test of that support level may reinvigorate fresh bearish momentum towards 1.4170, 1.4150 and 1.4120. Current resistance levels are seen at 1.4285, 1.4308 and 1.4340.

U.K. GDP numbers are due for release at 9:30 GMT and if GDP is lower than expected, sterling could easily slide below 1.42.

Important U.S. data are scheduled for release at 13:30 GMT with U.S. Durable Goods Orders, followed by Pending Home Sales at 15:00 GMT.

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2016 Maimar-FX.

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How Low Can Euro And Sterling Go?

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Dear Traders,

The U.S. dollar advanced to new highs against the euro and British pound. The greenback resumed its uptrend in expectation the Fed will hike next month while other central banks are biased to ease. The euro weakened toward a fresh low of 1.06 after European Central Bank President Mario Draghi encouraged speculation the ECB will increase stimulus next week. Draghi said Friday the central bank will do what it must to raise inflation “as quickly as possible”. The euro could thus be vulnerable to further losses ahead of the ECB’s next policy decision on December 3.

Nonetheless, traders should be cautious with short positions as central bank actions are mostly priced in. The downtrend in the EUR/USD may come to a temporary halt at 1.0585, 1.0560 or 1.0520.

This week is a shortened holiday-trading week as U.S. markets will remain closed for Thanksgiving holiday on Thursday and Friday. Important economic reports are scheduled for release on Tuesday and Wednesday with U.S. Gross Domestic Product, Personal Consumption, Consumer Confidence and Durable Goods Orders.

Important eurozone reports are due for release today with the Eurozone’s PMI reports and Tuesday with the German IFO Business Climate.

Sterling traders should watch the U.K. GDP figures, scheduled for release on Friday. While GBP may find a short-term support at 1.5150, key support levels could only be at 1.51 and 1.5030. Resistances are seen at 1.52 and 1.5240.

This week starts off with important data releases such as German Services and Manufacturing PMI reports at 8:30 GMT, Eurozone’s PMI reports at 9:00 GMT and U.S. Existing Home Sales at 15:00 GMT.

We wish you a good start to the new week!

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Difficult Market Environment

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Dear Traders,

The market environment is difficult for traders since global growth concerns and uncertainties about diverging monetary policies cloud the overall outlook. This uncertainty leads to risk-aversion,which can be seen in volatile but unsteady market swings. Both of our major pairs were lacking a clear direction yesterday and ended the trading day unchanged against the U.S. dollar. This meant that traders had to struggle with fake-outs and still have to be patient and wait for better market conditions.

Let’s have a look at the technical side:

EUR/USD

The euro was the worst performing currency recently and failed to provide profitable chances. On a monthly basis we see that the pair peaked at a high of 1.1460, but most of the period, it remained trading sideways between 1.1330 and 1.11. Those who are looking for long-term entries, should focus on the area above 1.1460/65 for buy orders and on the area below 1.10 for sell orders. For short-term investments, we still consider the 1.1280 level as an opportunity to buy the euro towards 1.1320/50. Short-entries, however, could be interesting below 1.1190 and below 1.1080. Remember that there is a key support at 1.1020.

Chart_EUR_USD_Daily_snapshot30.9.15

Today traders should watch the German Unemployment numbers, due for release at 7:55 GMT and the Eurozone CPI report, scheduled for release at 9:00 GMT.

GBP/USD

The British pound weakened eight consecutive trading days but found a slight support around 1.5130. The trend is our friend and we should bear in mind, that GBP may be vulnerable to further losses, but there could be a lower support area at around 1.5110 – 1.5090. If sterling declines significantly below 1.5130, we will focus on the 1.51-level, which could prompt the currency for a recovery. However, above 1.5210, chances are that sterling bulls drive the cable towards 1.5250 and 1.5285.

U.K. Gross Domestic Product is scheduled for release at 8:30 GMT today.

Chart_GBP_USD_4Hours_snapshot30.9.15

The most important piece of economic U.S. data will be the release of ADP’s employment change report (12:15 GMT). Market participants pay close attention to this report as it is considered to be a leading indicator for nonfarm payrolls.

Furthermore, FOMC members Yellen and Bullard are scheduled to speak on Community Banking today at 19:00 GMT.

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We wish you good trades and many pips!

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A profitable week is coming to an end

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Dear Traders,

The U.S. dollar extended its gains after data showed the U.S.economy grew more than forecast in the second quarter. The gross domestic product grew at a 3.7 percent rate, exceeding all expectations.

Short-traders have been very profitable for a third consecutive day and should now ensure that the weekly profit is not exposed to any risk. Therefore, you should consider doing either a trading break or trade with very small positions today.

The pound sterling dipped below 1.54 but managed to hold its ground and remained above the 1.54-mark towards the end of the day. U.K. Gross Domestic Product is scheduled for release at 8:30 GMT, a report which could trigger a major reaction in the GBP/USD if data is not in line with expectations.

Furthermore, we will keep an eye on German Consumer Prices, due for release at 12:00 GMT. From the USA, there will be second-tier data such as PCE numbers and Michigan Confidence, scheduled for release at 12:30 and 14:00 GMT.

It has been a profitable week, and that’s a good reason to lean back, relax and enjoy the 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 2015 Maimar-FX.

www.maimar.co