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U.S. Dollar Regains Strength, Focus On GDP Data

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Dear Traders,

The U.S. dollar regained some strength Thursday, leading to downturns in the euro and cable. The pound currently faces its support at 1.2550 and sterling bears may wait for breakouts below 1.2530 and 1.2490 to sell sterling towards 1.2450/1.24. For the pound to rally, it may need to climb through the 1.2610-level again.

The euro dropped significantly below 1.07 and our guess of upcoming bearish momentum following a head-shoulders pattern (stated in Wednesday’s analysis) was finally right. Now the euro will need to break below 1.0650 so that we can focus on lower targets at 1.0620 and 1.0590. Below 1.0580 however, bearish momentum could accelerate towards 1.05. Those who are looking for any further upside momentum should rather wait for prices above 1.0720 in order to buy euros. Above 1.0770 a higher target could be at 1.0815.

Today, all eyes will be on important U.S. data such as GDP figures and Durable Goods Orders, both reports are scheduled for release at 13:30 UTC. Fourth-quarter GDP numbers are forecast to show slower growth and if that forecast proves to be correct, we may see further weakness in the greenback.

We wish you good trades for today and a relaxing weekend.

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Is The Pound Poised For Further Price Gains?

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Dear Traders,

The U.S. dollar continued to weaken against the British pound and euro. Investors have been looking for further details on Trump’s plans to boost growth and government spending but there are no specific details given yet. In the long term however, this does not mean that the dollar rally is over. The greenback might continue its weakness on the lack of certainty but if president Trump delivers on his economic promises the dollar could quickly recover. Some economists, however, forecast the strong dollar to continue and even expect the dollar to reach parity with the euro by the end of the year. Let us wait to be surprised.

The euro still remained within its recent uptrend channel, albeit with a slight extension to a high of 1.0773. Yet, there was no bullish breakout and we will focus on prices above 1.0775 in order to buy euros towards 1.08/1.0850. A current support is however seen at 1.0660/50. The German and Eurozone PMI reports are scheduled for release at 8:30 and 9:00 UTC but we do not expect these reports to have a major impact on the euro.

The pound sterling knew only one direction: upwards. The pound headed for a test of its resistance zone around 1.2550 and it will now be interesting whether there is still room for further gains. Above 1.2570 we expect the pound to head for 1.2640 and 1.2690. How sterling will trade today also hinges on the U.K. Supreme Court ruling on the Parliament’s role in Brexit. It is expected that the High Court will vote in favor of Parliament’s approval in triggering Article 50. This decision may send the pound even higher. The ruling will be announced at 9:30 UTC and traders should prepare for volatile swings in the GBP/USD. Whatever the case, if the pound drops back below 1.24, we expect bearish momentum to accelerate.

From the U.S. we have Existing Home Sales due for release at 15:00 UTC but this report is unlikely to have a significant impact on the greenback.

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U.S. Dollars Recovers On Hawkish Fed Rhetoric

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Dear Traders,

The U.S. dollar regained some strength following a slew of hawkish Fed rhetoric. Federal Reserve Chair Janet Yellen reiterated in a town hall meeting that the U.S. economy is doing quite well. She was optimistic on the labor market and inflation and wage growth, saying that inflation is close to the Fed’s 2 percent goal.

These hawkish remarks helped the greenback to recover from its recent lows. The euro peaked at 1.0684 before falling back toward the 1.06-support level. Below 1.0570 we may see further losses towards 1.0480.

The British pound took a brief glimpse above 1.23 but was not able to stabilize above that high level. The 1.21-level will now be back in focus and if the pound drops below that mark, we expect a next lower target to be at 1.20. The beginning of next week is going to be interesting for sterling traders as U.K. Prime Minister Theresa May will set out her Brexit vision in a speech on Tuesday. Recent speculation about a so-called ‘hard Brexit’ has increased the pressure on the pound.

Today we will watch important economic data releases such as U.S. Retail Sales, scheduled for release at 13:30 UTC and University of Michigan Confidence due at 15:00 UTC. The Retail Sales report is expected to show an uptick in December and should this be confirmed, the dollar could recover even more quickly.

Have a nice weekend.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2017 Maimar-FX.

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January Is Typically Dominated By U.S. Dollar Strength

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Dear Traders,

The U.S. dollar jumped to the highest level in 14 years against the euro as U.S. manufacturing expanded. From a seasonality perspective, January is the greenback’s best month of the year and thus typically a bearish month for the EUR/USD. Looking back at the past performance, this pair has usually depreciated in January, making it an attractive opportunity to sell the pair on dips.

The euro touched a fresh low at 1.0340 but ended the trading day slightly above 1.04. From a technical perspective, we expect the EUR/USD to trade between 1.05 and 1.0370 in short-term time frames.

The British pound tested its 1.22-support which has proved intact for the time being. If the pound falls below that level we anticipate a lower support-level at 1.2150/30. Above 1.2310, however, sterling may head for a test of 1.2350 and 1.2380.

Today, the focus shifts to the Eurozone Consumer Price report, due for release at 10:00 UTC and the FOMC minutes of the Dec. 13-14 meeting, scheduled for release at 19:00 UTC. However, the Federal Reserve minutes are not expected to be a big market mover since Fed officials are unlikely to reveal anything new about the timing of the next policy move. Economists will also be looking for insights into policy maker’s thinking about fiscal policy changes under President-elect Trump and how they might react to measures. Nonetheless, the central bank will probably maintain a wait-and-see mode as too much remains uncertain.

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We wish you good trades and many pips!

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US Election: A Fateful Day?

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Dear Traders,

It’s Election Day in the U.S. and no other event matters financial markets more than this historical presidential election. The U.S. dollar slightly strengthened amid speculation that a Clinton win is more likely and therefore will pave the way for the Federal Reserve to raise interest rates next month.

Let’s briefly summarize the main points:

  • Final polls show a small but not insurmountable lead for Clinton
  • Results will start to come in after polls begin closing at 23:00 UTC (6 p.m. Eastern time)
  • Voting across the country will finish at 6:00 UTC (1 a.m. EST)
  • 4:00 UTC (11 p.m. EST) Earliest possible time to announce the winner.
  • Trump win would send the USD lower, at least initially. In the long-run, the dollar may strengthen on tax cuts and spending increases. The markets will face increased volatility and uncertainty. Risk-aversion will dominate.
  • Clinton win would send the USD higher as the focus shifts to Fed rate hike in December. Her victory could reinvigorate a fresh dollar rally while investors would become less risk-averse.
  • A tight race between Clinton and Trump would add uncertainty, which would be dollar-negative in the hours after the election.

As the price action will be determined by the latest polls, traders should prepare for both scenarios. In case of a Trump win, both of our major currency pairs will trade higher. Thus the euro could rise towards 1.12-1.1250 and even towards 1.14. The British pound could rise towards 1.2670/1.27. In case of a Clinton win however, the euro could fall towards 1.08 whereas the British pound might drop back towards 1.21. Let’s be surprised.

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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

 

 

 

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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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

 

 

 

U.S. Dollar Takes A Breather While Euro And Pound Recover Slightly

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Dear Traders,

We got what we have been looking for: A breakout of the cable’s narrow trading range. While an initial attempt to buy sterling above 1.2235 proved unsuccessful, breakout traders were later able to profit from the pound’s sharp drop towards 1.2080. Sterling tumbled before BoE Governor Carney’s testimony to the House of Lords Tuesday but bounced back from its fresh low of 1.2082 as Carney said there were limits to the Monetary Policy Committee’s (MPC) willingness to look beyond an overshoot of their inflation target. In other words, his comments on inflation mean that further easing is unlikely in the near term, highlighting policy makers’ concerns about the risk of stagflation, which arises from the depreciation of the pound.

Carney’s recent comments suggest the MPC will stick to the sidelines at the next ‘super Thursday’ event on November 3.

Technically the pound remains confined to a recent 100-pips trading range between 1.2250 and 1.2150. Above 1.2250 it could head for a test of 1.2320 whereas a break below 1.2130 may drive the GBP/USD to fresh lows around 1.2050.

The EUR/USD however, failed to show larger movements yesterday and remained stuck between 1.09 and 1.0850. It was the second consecutive trading day on which none of our signal entries was triggered. European Central Bank President Mario Draghi defended the ECB’s easy monetary policy but conceded that low interest rates are not ‘costless’ for the eurozone and policy makers “certainly prefer not to have to keep interest rates at such low levels for an excessively long time”. Draghi’s ‘neutral position’ drove the euro higher but gains were capped at 1.09 for the time being. We are still looking for a significant break above 1.09 but any upward movements could be on a shaky footing as a next resistance is seen at 1.0950.

There are no major economic reports scheduled for release today. The only reports come from the U.S. and will be Advance Goods Trade Balance at 12:30 UTC, Services PMI at 13:45 UTC and New Home Sales at 16:00 but none of these reports is expected to have a major impact on the greenback.

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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

 

 

 

Small Profits Amidst Quiet Trading Environment

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Dear Traders,

We welcome you to the last trading days before our summer holiday break. While Friday’s strong payrolls report spurred many investors to hope for a Federal Reserve rate increase by the end of this year, the gains in the U.S. dollar were limited due to the lack of momentum during the traditional quiet summer month of August. As a result of these weak market conditions and low volumes, traders must be satisfied with smaller profits.

The greenback advanced against its major peers on the back of greater U.S. jobs growth, but it seemed as if the euro and British pound were looking for a support, rather than paving the way for further dollar gains. The euro tested the 1.1050-level which proved to withstand the downward pressure for the time being. Given that crucial support level short-traders should better wait for prices below 1.1040 in order to sell the euro towards 1.0970 and 1.09. The British pound rebounded after testing the 1.3020-level, which led support to the pound. As long as sterling remains above 1.30 there is no reason to focus on lower price targets. With no market moving data on the calendar until the final day of the week we expect the price action in both major currency pairs to be limited to narrow trading ranges.

It might be a quiet week as the only interesting pieces of economic data will be released on Friday with the German and Eurozone GDP reports, followed by U.S. Retail Sales and Michigan Confidence.

We wish you a good start to the new week and recommend trading by a low-risk management as the current market conditions are less profitable.

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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

 

 

 

Pound In Free Fall Amidst Uncertainty

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Dear Traders,

The free fall of the British pound continues with the U.K. economy facing difficult times in the aftermath of Britain’s vote to leave the EU-bloc. The huge sell-off in the pound was the biggest story in the market yesterday and it continued even during the Asian trading session, sending the pound to a record low of 1.2797. The effects of Brexit on the U.K. economy and its confidence are becoming more and more evident. Meanwhile, Bank of England Governor Mark Carney outlined more tools to contain the Brexit fallout, pledging to implement any other measures needed. Carney warned of prospects for “a material slowing of the economy” amid concern over the health of the global economy.Given the high level of uncertainty in the U.K. commercial property market, three of the U.K.’s largest real estate funds have frozen almost 9.1 billion pounds of assets to halt Brexit retreat. All in all, the pound’s future does not look bright and traders should expect further losses given the uncertain environment. Dark clouds are gathering on Britain’s horizon and this is only the beginning.

Given the pound’s sharp depreciation, investors seek for safer assets, flocking into the U.S. dollar. The euro dropped towards 1.1035 as a result of that risk aversion. A next important support is seen around the 1.0990-level. Below 1.0980, we expect the euro to fall towards 1.0940 and 1.0870. On the upper side, the euro rejected the 1.1186-level, from where it went into a tailspin. With the 1.12-resistance being intact for the time being, euro bulls should wait for a break above 1.1215/20 in order to buy euros towards higher targets.

Market participants pushed back their bets for a Federal Reserve rate hike this year, even though the Fed is likely to stay on track to raise interest rates if growth and inflation expectations are met.

The Fed releases minutes from its June 14-15 FOMC meeting, but the FOMC minutes are expected to take a backseat to heightened concerns about global growth and risk aversion.

The ISM Non-Manufacturing Index, scheduled for release at 14:00 UTC will be watched closely whereby a better figure could add further strength to the greenback.

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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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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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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