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Pound Takes Breather While The Euro Stabilizes Around 1.1050

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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Brexit! Will The Euro Crash?

Dear Traders,

What can we say about the market today? Awesome, sad, impressive or the reaction was foreseeable? One thing is certain, however: Traders were able to get a substantial slice of the pie. From our point of view, the nighttime trading went very well. We achieved a reasonable profit with each of our entries in both currency pairs and we are therefore more than satisfied with our performance. Incidentally, our biggest single gain last night was a 420-pip profit, which was recorded by our short-entry in the GBP/USD.

The pound sterling crashed as the U.K. voted to quit the European Union. The first reaction has led to a massive sell-off in the pound. The euro moved in tandem with pound while the euro’s trading range was confined to 500 pips (5 percent), whereas the pound’s range extended to 1700! pips (17 percent). The pound’s downward move is the biggest drop of all time as Britain’s future is highly uncertain after the vote to exit the EU. The next steps are unclear, EU leaders and finance ministers could confer as soon as this weekend. The future path of the EU and U.K. is clearly subject to downside risk, this is the only (sad) certainty at the moment.

EUR/USD downside risks: If the euro breaks below 1.0890, a next support could be around 1.0820. Below 1.0780 the euro could tumble towards 1.0710 and 1.0560.

The storm in the Forex market is not yet over and traders should be cautious. If you already gained a good weekly profit then stop trading for this week. If you don’t mind getting your fingers burnt, then go ahead.

We say goodbye to this fateful week and wish you a wonderful 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 2016 Maimar-FX.

www.maimar.co