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Sterling Traders Benefit From High Volatility Environment

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Dear Traders,

The pound sterling is currently the most volatile currency and traders’ efforts were rewarded once again: As expected in yesterday’s analysis, some of the GBP’s recent losses have been corrected due to an oversold situation. Consequently, our long-entry has proved to be successful, providing traders a nice profit on Monday. The pound rejected the 1.4330-level and dropped back below 1.42. Given the fact that the ‘Leave’ Campaign gains ground against the ‘Remain’ before next week’s referendum, traders should generally expect further losses in the GBP. A next lower target could be at 1.40, whereas corrections might be limited until 1.4260. U.K. Consumer Prices are scheduled for release at 8:30 UTC and even if the report comes in with an uptick in CPI, the pound is likely to remain under pressure.

The euro tested the 1.13-barrier and held steady around that level amidst uncertainties surrounding the Brexit vote and the Federal Reserve’s rate decision. With no major important economic reports scheduled for release from the Eurozone, the euro is expected to fluctuate within smaller trading ranges. The focus will rather be on the U.S. dollar and important U.S. data such as Retail Sales due at 12:30 UTC. Retail Sales are expected to show a slower growth in May and this expectation could weigh on the dollar before the report is due for release.

We currently see a higher likelihood for upcoming bullish momentum, driving the EUR/USD towards 1.1390. A crucial resistance level is seen at 1.1330/40 which must be significantly breached to the upside in order to reinvigorate fresh bullish potential. If the euro is unable to break above 1.1305 we will shift our focus to the 1.1270-level. Below that level we expect the euro to fall towards 1.1240 and 1.1215.

Chart_EUR_USD_Hourly_snapshot14.6.16

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UK Referendum Cast Its Shadows Before – Investors Are Turning To Safe Assets

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Dear Traders,

We welcome you to a new trading week and it is getting more and more exciting as we are approaching the U.K. referendum next week, which will maintain its grip on the markets. The U.S. dollar appreciated against the euro and British pound last Friday as it benefited from safe-haven flows in the run-up to the U.K. vote. The British pound broke below 1.43 as anxiety about a potential Brexit considerably reduced the demand for sterling. While the Yen benefits most from safe-haven flows, the appetite for U.S. dollars mainly hinges on the Federal Reserve’s tightening cycle. Despite a busy economic calendar this week, the main focus will therefore be on the FOMC rate decision on Wednesday. No one expects the Fed to raise interest rates this month but Janet Yellen’s press conference could set the tone of the debate on further tightening in 2016. Apart from the FOMC announcement, the June 23 referendum is casting its shadows before: A survey published last Friday showed the ‘Leave’ camp being in the lead. U.K. Consumer Prices are scheduled for release on Tuesday, while the Bank of England will announce its monetary policy decision on Thursday. However, overshadowed by Brexit concerns, the BoE announcement is going to be a non-event for traders.

From the U.S. we have Advanced Retail Sales (Tuesday) and the CPI report (Thursday) scheduled for release. All in all, it could be a busy week for traders and as long as there is volatility in the markets, there will be opportunities for larger gains.

GBP/USD

The cable broke below its crucial support at 1.43 and could be headed for a test of 1.41 and 1.4050 in a next step. Looking at the daily chart we see a current downward channel which suggests further bearish momentum towards the lower bound at 1.4080. But be careful: The pound fluctuates in an oversold territory and could now be vulnerable to volatile upswings. Thus, pullbacks towards 1.4350 and 1.44 are not unlikely.

Chart_GBP_USD_Daily_snapshot13.6.16

From the Eurozone there will be no major economic reports on the calendar. Thursday’s Consumer Price report could have a minor impact on the euro but how the EUR/USD will trade this week, will mainly hinge on the performance of the greenback and safe-haven demand. The euro marked a current support at 1.1230. With a break below 1.1225 it could extend its losses towards 1.1195 but we expect bearish momentum to be limited as the currency pair could be vulnerable to some pullbacks now. We see a current resistance at 1.13/1.1320.

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Rate-Rise Expectations Unchanged After Disappointing Payrolls

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Dear Traders,

Market participants were left relatively unimpressed by Friday’s weaker-than-expected U.S. jobs report, which showed the smallest jobs gain in seven months. Although earnings growth came in with an uptick it was not enough to change investors’ expectations of gradual monetary policy tightening. The market’s rate-rise expectations therefore remained unchanged and traders see an even chance of a Fed rate hike this year and only an eight perecent probability of a June hike.

As expected, the euro’s price action remained confined within a narrow trading range between 1.1480 and 1.1380 on the back of an unspectacular payrolls report. The British pound finally decided to drift lower after touching a high of 1.4546 on Friday. We still expect GBP/USD to test the 1.4330/15-level, before we may see a pullback towards 1.4550. A short-term resistance is seen at 1.4465, whereas sterling must now break below 1.44 in order to revive fresh bearish momentum.

This week’s calendar is relatively light in terms of market moving data. Only towards the end of the week we have major important reports scheduled for release. The most important event for sterling traders will be the Quarterly Inflation Report, scheduled for release on Thursday. The Bank of England will publish new forecasts in its inflation report, alongside its interest-rate decision. BoE governor Mark Carney is set to give a press conference on the economic outlook following the release of the inflation report.

The most important piece of economic data from the Eurozone will be GDP reports scheduled for release on Friday. From the U.S., Advance Retail Sales, also due on Friday will be important to watch.

We wish you a good start to the new week and many profitable trades.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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U.S. Data To Help The Greenback Regain Strength?

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Dear Traders,

The British pound extended its gains towards 1.4350 after CPI data came in stronger than expected, reaching the highest level since December 2014. Nonetheless, the pound was not able to maintain the high price level and finally ended the day unchanged against the U.S. dollar. Our focus now shifts to the next support level at 1.4225. In case of a break below 1.4225, lower targets are seen at 1.4207, 1.4195 and 1.4170. The market’s attention is focused on U.S. Retail Sales, scheduled for release at 12:30 GMT and as the figure is a significant market mover and expected to show a rise in March, market participants might be inclined to be bullish on USD ahead of the report.

The euro peaked at a yearly high of 1.1465 before prices quickly reversed direction and dropped back to below 1.14. The attention is now directed to the lower band of the euro’s current trading range. A break below 1.1335 could boost bearish momentum and send the euro towards 1.13 and 1.1285. Below 1.1280 we expect the euro to decline toward the 1.12-level. However, in case of renewed upward momentum, we will pay attention to current resistance levels at 1.14 and 1.1430 but bullish movements exceeding these levels could be limited until 1.1470.

The U.S. Retail Sales report will be the most important piece of economic data today and Industrial Production figures from the Eurozone (9:00 GMT) and the Fed’s Beige Book (18:00 GMT) could thus take a backseat.

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Copyright © All Rights Reserved 2016 Maimar-FX.

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Possible Pullbacks In The Greenback – Focus On U.S. Retail Sales

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Dear Traders,

The U.S. dollar was supported by speculation about the trajectory of interest rates before the Fed announcement tomorrow. While a rate hike this month is very unlikely ,chances for an increase later this year have increased. The probability of a rate hike in June is now about 50 percent while analysts see a 63 percent chance of an increase by December.

The euro weakened against the greenback but was able to remain above the 1.1070-50 support area. We will focus on a break of 1.1070/50 in order to sell the pair EUR/USD towards lower levels at 1.10 and 1.0910. On the upside gains could be limited until 1.1160 and 1.1220. With only one day to go before the FOMC announcement the dollar could be vulnerable to pullbacks as U.S. Retail Sales scheduled for release at 12:30 GMT are forecast to show a marked decline in February.  

The pound sterling returned to the slippery slope, falling back below 1.43. As stated in yesterday’s analysis we see a current support at 1.4250/40. Once that support level is significantly breached to the downside we will shift our focus towards lower targets at 1.4170 and 1.4120. Current resistances are seen at 1.4310 and 1.4360.

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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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Can U.S. Retail Sales Boost Attractiveness Of The USD?

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Dear Traders,

After the first day of testimony from Janet Yellen the currency market returned to business as usual. Investors ignored the second day of her testimony and shifted their focus away from the dollar towards safe havens such as the yen. The euro continued to benefit from its role as a funding currency and trended upwards, extending its gains as far as 1.1376. The cable, however, traded lower and dropped towards its support at 1.4380. The GBP/USD defined a current trading range between 1.4590 and 1.4380 and therefore may need a catalyst in order to extend movements above or below that range. The U.S. Retail Sales report and U.S. Consumer Confidence, scheduled for release today, may trigger some movements in the greenback.

The euro traded resiliently above 1.13 on Thursday and euro-bulls must have strong nerves in order to pocket their later profits. Unfortunately we terminated our trading slightly too early and therefore missed out on the last profitable upward move in the EUR/USD.

The most important economic report today will be U.S. Retail Sales due for release at 13:30 GMT. Stronger spending is an indication of strength in the U.S. economy which is why the Fed is closely monitoring this report. Given the forecast of no outstanding rise, the risk is to the downside for the USD. In case the report surprises with a far higher increase than 0.1 percent, the greenback could rally.

Furthermore we have the GDP reports from the eurozone, scheduled for release at 10:00 GMT, which could have a short-term impact on the EUR/USD. Last but not least, Michigan Confidence, due for release at 15:00 GMT could affect the dollar.

Have a nice 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.

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Dollar Bulls Need More Signals To Reinvigorate The Long-Dollar Trade

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Dear Traders,

After investors have been scared out of their long-dollar positions ahead of Friday’s U.S. job report, they must now reconsider the timing of interest-rate hikes this year. The latest non-farm payrolls report raised doubts about recent speculations the Federal Reserve could be inclined to forgo future rate increases in 2016. While payrolls increased by only 151K last month, the jobless rate fell to 4.9 percent, which was the lowest level since February 2008. In addition, wage growth showed a higher reading, which was reason enough for dollar bulls to send the greenback higher. Nonetheless, it was not easy for traders to handle the sharp fluctuations when job numbers were due for release. Consequently, those who have made a trading break on Friday have made the best choice.

What is important for the this week?

Apart from Fed-Chair Janet Yellen’s testimony on Wednesday and Eurozone GDP-reports and U.S. Retail Sales on Friday the economic calendar is light. Yellen appears before the House Financial Services Committee to testify on economy and monetary policy and market participants will look for an unambiguous confirmation of the future outlook, whether the Fed will grow less hawkish or maintain an optimistic stance, pointing to further tightening in 2016. The dollar’s performance could therefore hinge on Wednesday’s testimony.

The GBP/USD seesawed Friday but ended the week below 1.45. Our focus will be on the 1.4350-level, which may act as a support for the currency pair. A significant break below that level could send sterling back towards 1.4240 and 1.4150. However, remaining above 1.44, we might see the pound rallying towards 1.46 and 1.47, albeit we assume that the 1.47-mark could be a strong resistance. There are no major economic U.K. data reports until Wednesday when Industrial and Manufacturing Production is scheduled for release.

The EUR/USD is currently trending downwards. We expect the 1.1070-level to lend a short-term support for the pair. If this support proves to be correct, we may see a small rebound towards 1.1150 and 1.1180. This scenario would then format a head-shoulders pattern, which could be in play as soon as the euro breaks below 1.1070, reinforcing strong bearish momentum.

Chart_EUR_USD_4Hours_snapshot8.2.16

We wish you a good start to the week and many profitable trades.

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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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Whipsaw Performance In Both Currency Pairs

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Dear Traders,

While we initially anticipated further trendsetting movements in the GBP/USD on Thursday, traders have been disappointed by the cable’s zigzag moves ranging between 1.4445 and 1.4360. In the face of GBP’s recent depreciation, the currency might have taken a little breather yesterday, which has led to false breakouts and limited movements, making it an overall non-profitable trading day. Bank of England officials kept its monetary policy unchanged and said the outlook for growth and inflation has weakened further. Thus, investors continue to hold a very bearish bias over the medium-term.

The euro, however, started the day with some profitable bullish moves towards 1.0945. That short-term rise can be attributed to speculation that further European Central Bank stimulus may be limited. On the other hand, some ECB policy makers expressed a preference for an even larger rate cut, according to an account of the Dec. 3 policy meeting, published on Thursday. The ECB next meets on January 21 and investors will be looking for new insights into the ECB’s guidance.

The U.S. dollar slightly weakened on cautious comments from Federal Reserve President James Bullard, who sounded more cautious by saying the latest decline in oil prices may delay the return of inflation to the Fed’s target of 2 percent.

All in all, it was none of our favorite trading days as the market failed to provide much consistency in the currencies performances.

Today, traders will have another opportunity to watch out for some strong movements in the U.S. dollar. U.S. Retail Sales are scheduled for release at 13:30 GMT and this report could trigger a strong reaction in the greenback.  Retail Sales are expected to show a decline in December and any surprises could affect the dollar’s performance. Last but not least, Michigan Confidence is due at 15:00 GMT.

Let’s see if we can pocket some profit on the last trading day of this week.

Have a nice 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

 

 

EUR/USD: Will The 1.10-Barrier Withstand The Upward Pressure?

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Dear Traders,

While U.S. nonfarm payrolls have surged to 292K jobs in December, beating all estimates, Friday’s dollar rally did not last long. The spoilsport was slower wage growth, which disappointed the market’s expectations and increased less than 2.7 percent.  The EUR/USD experienced a sharp dip towards 1.08 at the time when payrolls were released but the pair was able to quickly recover all losses. As noted in previous analysis, the 1.10-1.1050 area remains to be a key resistance zone. As long as the currency pair trades below that area, we will favor a bearish stance, targeting lower price levels at 1.0810 and 1.0720.

The British Pound fell to a five-year low against the dollar, dipping slightly below the 1.45-mark. A reason for GBP’s current weakness is a more pessimistic outlook for a first rate increase by the Bank of England. In the light of the current financial turmoil in China the BoE’s policy stance could be more dovish, waiting with a liftoff until well into 2017. In addition, the uncertainty surrounding the U.K.’s possible exit from the European Union threatens to weigh on the economy, which is why the BoE is expected to keep policy unchanged for a considerable time. The central bank will announce its latest monetary policy decision on Thursday. Aside from the BoE interest rate decision, Industrial and Manufacturing Production numbers, scheduled for release on Tuesday could be interesting to watch.

The most important piece of U.S. data will be Retail Sales, due for release on Friday. Furthermore, we will have some speeches of Federal Reserve officials throughout this week, which may impact on the dollar.

There are no major economic reports from the eurozone this week but the eurogroup meeting towards the end of the week could reveal interesting information for euro traders.

Let’s wait and see. We wish you a good start to this week and successful trading.

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We wish you good trades and many pips!

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Copyright © All Rights Reserved 2016 Maimar-FX.

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Rebound for the U.S. Dollar?

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Dear Traders,

Last Friday the markets tended to lack direction and did not provide attractive opportunities to invest profitably. The U.S. Non-Farm Payrolls report showed a stronger-than expected job growth of 211k with a steady unemployment rate. Average hourly earnings were in line with expectations and showed a slightly lower rise. All in all, payrolls data supported the view that the U.S. economy can withstand a rate increase by the Federal Reserve. The reactions of the market, however, have been very modest. It could be observed that market reactions to incoming data have been fundamentally changed showing that as long as there are no major surprises, the market does not react anymore.

What is important for the week ahead?

The most relevant reports and events are scheduled for release towards the end of this week. On Thursday we will have the Bank of England’s Rate Decision and a speech by BoE Governor Carney. The U.S. Retail Sales report will be the most important piece of data from the U.S., due for release on Friday. From the Eurozone we have the Gross Domestic Product figures, scheduled for release on Tuesday.

There are no important reports scheduled for release today, but sterling traders should pay attention to a speech by BoE Governor Carney at 15:00 GMT. In short-term time frames, GBP would need to break below the current support at 1.5080 and further 1.5050 in order to reinvigorate bearish momentum. A current resistance is seen at 1.5150.

EUR/USD

Bearish Bias: Technically the currency pair is tending towards a break of the 1.0850-level. Based on the descending triangle, we will focus on a break of the 1.0850/30 area in order to sell the pair towards lower levels. Lower targets could be at 1.0790 and 1.0750. Resistances are seen at 1.09 and 1.0950.

Chart_EUR_USD_Hourly_snapshot7.12.15

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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