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EUR/USD And GBP/USD With Long Overdue Corrections, Next Targets To Watch Out For

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All Eyes On U.S. CPI Data

Dear Traders,

The FX market on Thursday can be described as rather muted. As expected, GBP/USD traded higher but the bullish momentum was limited to a high of 1.2955. The cable now needs to overcome the 1.30-barrier in order to encourage sterling bulls for a test of 1.3020/45 . EUR/USD traders however, sold euros below 1.1420 but yesterday’s downward movement was limited to a low of 1.1370. A break below 1.1380 has thus failed to ignite bearish momentum toward 1.13.

Today might be more interesting for traders as U.S. Consumer Inflation due at 12:30 UTC will be closely scrutinized. Yellen believes that the current downtrend in inflation will be temporary and if she is right and we see upbeat inflation figures, the greenback will rise. However, there is a risk that inflation could slow again in June and this would increase the pressure on the U.S. dollar. If the forecast is correct and inflation slowed to 1.7 percent, it is the fourth consecutive month of deceleration and the weakest reading since November 2016.

Let’s be surprised while we prepare for higher volatility around the release of CPI data.

We wish you good trades and a beautiful weekend.

If you want to know how to exactly trade EUR/USD and GBP/USD including an appropriate money management per trade and day, sign up for our daily signal service here.

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BoE Disappoints, Pound Falls, What’s Next?

Dear Traders,

The Bank of England disappointed investors that have been buying the British pound ahead of the Inflation report as the medium-term inflation forecast came in lower than expected. Traders who had hoped for a hawkish tone or more than one dissent calling for a rate hike in the BoE’s monetary policy statement were disappointed. Officials cut their economic growth forecasts this year to 1.9 percent from 2 percent. While the BoE sees a slightly weaker path in the medium-term it expects inflation to be accelerating again by the end of 2019. To sum up, it can be said that the central bank is moving more slowly with a potential rate hike not being in the cards until 2019.

The pound dropped in response to the weaker forecasts but the slide came to a halt at around 1.2850. If sterling climbs back above 1.29 and is able to hold above that level we shift our focus back to a potential test of the 1.30-resistance level.

Today, traders will pay close attention to important U.S. economic reports such as Retail Sales and Consumer Prices, both reports are due for release at 12:30 UTC. Investors are looking for a positive reading, confirming that the U.S. economy is picking up the pace enough to withstand higher interest rates. However, a disappointment in U.S. data could send the dollar lower, providing the basis for fresh upswings in the cable and euro.

Last but not least, University of Michigan Confidence is due for release at 14:00 UTC.

We wish you good trades and a wonderful weekend.

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

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Wild Wednesday: Anything Is Possible, Even A Disappointment Despite Fed Tightening

Dear Traders,

It’s Fed-decision day and the waiting finally comes to an end. After several days of range-bound conditions and low volatility, traders now prepare for volatile swings and trend-setting movements. The probability of a Federal Reserve rate hike is completely priced in while the U.S. dollar shrugged off the bullish bias. The greenback’s reluctance to commit to further tightening suggests that dollar bulls might be unimpressed by the FOMC policy announcement.

The Fed’s monetary policy decision will be announced at 18:00 UTC but the impact on the dollar could be muted as traders appear to be well prepared for a March rate hike. The spotlight however, will be on the following press conference with Fed Chair Janet Yellen and revised rate path projections. Economists expect the path for rates to include three hikes this year and in case of a steeper tightening path, the dollar will rally. However, there is a greater potential for disappointment and if Yellen sounds more balanced, preferring a wait-and-see mode, the dollar will be vulnerable to losses.

All eyes will be on the FOMC announcement but before that major risk event, traders should also pay attention to U.S. Consumer Prices, scheduled for release at 12:30 UTC.

Apart from the Fed decision, elections in the Netherlands will draw the focus back on the euro’s resilience. The Dutch vote is the biggest test of the strength and resilience of the populist surge this year. The euro could therefore tend to fluctuate sharply towards the end of the American trading session.

EUR/USD

From a technical perspective, we expect bearish momentum to accelerate if the euro falls below 1.0570. Lower targets could then be at 1.05 and 1.0380. A short-term resistance is however seen at around 1.0650. If the euro significantly breaks through that resistance-level we may see further gains towards 1.07 and 1.0790.

 

GBP/USD

Today’s short squeeze in the British pound was an impressive reminder that there is still potential for exaggerated movements. The pound surged to a high of 1.2257, which is considered a current resistance-zone in the cable. Above 1.2260 we may see further gains toward 1.23 but everything is possible today and the price action will also hinge on the appetite for USD. We generally anticipate the cable to remain within a range between 1.24 and 1.21 for the time being. On the bottom side, the pound will need to break below 1.2080 in order to invigorate fresh bearish momentum.

The U.K. employment report is due for release at 9:30 UTC and could have a minor impact on the pound.

 

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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.

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USD Receives Boost On Hawkish Yellen Comments

Dear Traders,

The U.S. dollar was bolstered by hawkish comments from Fed Chair Janet Yellen on the first day of her testimony. While Yellen did not reveal much new information, she was surprisingly hawkish, saying that “waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets”. In other words, the pace of interest rate hikes could accelerate, still leaving the door open for a hike in March. Market participants will now shift their focus to the U.S. Consumer Price data with the intention to evaluate the need for faster rate normalization.

The greenback traded higher against the euro and British pound and while we generally expect further gains in the dollar, traders should also prepare for some pullbacks in short-term time frames.

The euro found some halt at 1.0560 and it may now tend to correct recent losses towards 1.0615 and possibly even 1.0630. Today’s price action will, however, again hinge on the demand for dollars. In case of better-than-expected CPI data the euro could extend its losses towards 1.0540 and 1.05.

The British pound dropped towards 1.2440 after the U.K. Consumer Price Index failed to meet market expectations. Signs of weaker price growth may encourage the Bank of England to maintain a neutral monetary policy. From a technical perspective, the cable is still confined within a sideways trading range between 1.2550/85 and 1.2440. A break below 1.2440 may prompt sterling bears to sell sterling towards 1.2350 and further 1.2270. On the topside, the pound will need to break through 1.2530 and 1.2560 in order to invigorate fresh bullish momentum.

We will keep an eye on the U.K. Labor Market report, due for release at 9:30 UTC, which could affect the price action in the GBP/USD, provided that there is any surprise.

Higher volatility is expected during the U.S. session with Consumer Prices and Advance Retail Sales scheduled for release at 13:30 UTC.

Fed Chair Yellen will testify before the House Financial Services Committee at 15:00 UTC.

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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

 

 

 

Profitable Trading In A Politically Driven Market

Dear Traders,

In summary, we can say that it has been a very profitable trading day in a politically driven market. While the Brexit and Trump themes are market-dominating there is only one thing that matters to traders: The profit at the end of the trading day and yesterday’s profit was quite good. Sterling traders were able to generate a profit of 100 pips by our long entry and also euro traders did not go home empty-handed, pocketing a good gain by trading twice yesterday’s long entry.

What happened in the market? Two things came together. Firstly, the U.S. dollar has lost some of its strength after Donald Trump said that the dollar is already ‘too strong’, posing a challenge to the economy. This prompted investors to take profits on their long dollar positions.  Secondly, U.K. Prime Minister Theresa May has calmed the markets as a ‘hard’ Brexit may not be as hard as expected. While she said that the U.K. “cannot possibly” remain within the European single market, pursuing a hard Brexit, May confirmed that the final deal would be put to the vote in Parliament. The fact that the parliament will approve the final Brexit deal is positive for sterling due to hopes that the deal must be good in order for the parliament to approve it.

GBP/USD

The pound climbed to a high of 1.2415 following May’s speech. True to the motto “The trend is your friend”, there are chances that the pound may extend its recent gains to 1.25 provided that sterling is able to take the hurdle at 1.2430. However, after such a strong price movement we also anticipate corrections. A next support is now seen at 1.23. If the pound falls back below 1.2270 we expect a lower support to be at 1.22.

The U.K Labor Market report is scheduled for release today at 9:30 UTC and if wages confirm a steady growth, sterling bulls might push the cable to higher levels.

EUR/USD

The euro formatted a recent uptrend channel and based on that channel, further gains may be limited to the upper trend line at 1.0730. We expect a next resistance area to be at 1.0750 whereas a current support is seen at 1.06.

Eurozone Consumer Prices are scheduled for release at 10:00 UTC today but we do not expect this report to have a significant impact on the euro.

The most important piece of economic data will be the U.S. Consumer Price report due for release at 13:30 UTC. In case the report comes in with an upside surprise the dollar will regain some strength.

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