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Profitable Sell-Off In EUR/USD And GBP/USD

Dear Traders,

After several days of sluggish price fluctuations, yesterday has proved to be a profitable trading day in particular for short traders of the EUR/USD and GBP/USD.

The British pound continued its slide versus the U.S. dollar on the back of worse-than-expected U.K. inflation data. The annual CPI fell to 2.4 percent from 2.5 percent while the core CPI fell to 2.1 from 2.3 percent. Lower inflation could keep interest rates lower for longer with the Bank of England being in no rush to tighten monetary policy sooner rather than later. Thus, BoE rate hike expectations are pushed back to November.

The pound marked a fresh support at 1.3305 from where a slight recovery started. As long as pullbacks are limited to 1.34 and 1.3450, sterling bears might retain control.

The euro fell below 1.17 after the weak PMI reading put further pressure on the single currency. We now focus on the 1.1810-level which could act as a short-term resistance. A break below 1.1650 could open the door for further losses towards 1.1620 and 1.1550.

The FOMC Minutes had only a limited impact on the dollar’s price action. With the markets widely anticipating a Fed rate hike in June the minutes were not expected to reveal anything new. The only note in the statement that weighed on the dollar was that “it was premature to conclude that inflation would remain at levels around 2 percent”.

Today we have U.K. Retail Sales scheduled for release at 8:30 UTC. Furthermore, BoE Governor Mark Carney is scheduled to speak at the BoE Markets Forum in London.

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U.S. Dollar Mixed After FOMC

Dear Traders,

The U.S. dollar produced a mixed reaction to the FOMC statement and unfortunately, we were caught on the wrong foot when we tried participating in yesterday’s choppy waters. While the dollar showed some pullback on the initial release of the statement, that rebound proved short-lived with the dollar finishing the trading day cautiously higher against the euro and British pound.

The FOMC announcement didn’t really disappoint dollar bulls with the Fed upgrading its view on inflation, even though not so much on economic growth. The chances of a rate hike next month are at 100 percent while odds for a September and December hike remain unchanged.

Trading the choppy swings yesterday proved unsuccessful for day traders but that’s trading and these days can happen.

The euro faces some event risk today with the Eurozone Consumer Price Index, scheduled for release at 9:00 UTC. If CPI data disappoints we might see a drop towards 1.19 in the EUR/USD. Euro bulls, however, should watch out for price breaks above 1.2030.

The British pound dropped to a low of 1.3554 in the aftermath of the FOMC. If the GBP/USD remains below 1.3620 we expect the cable to extend its losses versus the greenback.

From the U.S. we have the ISM Non-Manufacturing Index scheduled for release at 14:00 UTC today.

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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 2018 Maimar-FX.

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Euro And Pound Depreciate Against U.S. Dollar

Dear Traders,

Monday’s worst performing currency was the British pound which fell towards 1.3250 after weak U.K. manufacturing figures prompted concerns over the country’s health. The GBP/USD extended its slide this morning and tagged a low at 1.3229. On the other side, a stronger U.S. dollar contributed to the cable’s decline. After testing the crucial support area around 1.3230/1.32, we will shift our focus now to a significant break of that support-zone which could lead to further losses towards 1.3150 and 1.3050. With GBP/USD remaining below 1.34 we generally favor the bearish bias in short-term time frames.

The U.K. Construction PMI report is scheduled for release at 8:30 UTC, but this report is not expected to have a major impact on the pound.

The euro extended its slide against the greenback and fell towards 1.17. The U.S. dollar’s recovery was bolstered by a stronger ISM manufacturing sector activity index, which hit a 13-year high. As mentioned in our yesterday’s analysis we still wait for a significant break below 1.1680 in order to anticipate further losses in the EUR/USD.

There are no major economic reports scheduled for release today, so the price action could hinge on the appetite for dollars.

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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

 

Euro Drops On Fears The EU Could Collapse

Dear Traders,

The euro weakened against the U.S. dollar after investors have been reminded that the French election is one of the biggest risks this year with the prospect of a victory of Marine Le Pen fueling concern that the European Union will collapse. France’s far-right leader Le Pen unveiled a manifesto pledge on Monday in which she said that she would take the country out of the EU should she win. Within this climate of increasing anti-globalism there is not much that is positive and currencies become victims of these policies. The euro fell towards 1.07 and we will now wait for a sustained break below that support-level. If the euro falls below 1.0680 we expect further losses towards 1.0620. On the upside we see a current resistance around 1.0780.

The British pound’s downward movement came to a short-term halt near 1.2425. We are anticipating further losses in the cable and thus focus on a significant break below 1.24. A short-term resistance is however seen around 1.2550.

With no major economic data on the docket, the price action will be determined by political developments and global risk appetite.

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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

 

 

 

Euro Drops On Prospects Of EU Instability

Dear Traders,

Italy votes ‘No’ and the euro falls. The single currency dropped more than 1% against the U.S. dollar after Prime Minister Matteo Renzi‘s program of constitutional reform was rejected by Italian voters by a clear majority in Sunday’s referendum. Renzi said he will hand in his resignation to President Sergio Mattarella on Monday and while there are fears the vote could further shake up Europe’s financial stability, investors are selling the euro and Italy’s bonds as they see Italy as the biggest risk to the future of the eurozone. Markets now assess the risk of early elections and if they happen, the eurosceptic Five-Star Movement could campaign on a promise to hold a referendum on Italy’s membership in the euro.

While a ‘No’ vote was already priced into Italy’s government bonds the most immediate concern is a potential banking crisis and the risk of contagion around Europe. So all in all, short-term prospects for the euro appear to be somewhat gloomy so let’s take a brief look at the technical picture.

EUR/USD

In an initial reaction to Renzi’s defeat, the euro dropped towards 1.05 but it was able to stabilize around 1.0560. If it falls again below 1.0530 we see a higher likelihood of further losses towards the descending trend line which is currently at 1.0470/60. Below 1.0460 however, the dollar rally could accelerate with the euro heading towards parity. For the euro to gain some ground it might need to stabilize above 1.0585 and then head back towards the 1.0660-resistance.

chart_eur_usd_4hours_snapshot5-12-16

Austria‘s presidential vote was however received with relief after Alexander Van der Bellen defeated Norbert Hofer, sending “a signal of hope and positive change throughout Europe”. The Austrian vote was seen as a victory over the populist sentiment in Europe.

The focus now shifts to the European Central Bank meeting on Thursday and while a period of political uncertainty might follow after Renzi’s defeat, the ECB could announce even more aggressive measures to support the European economy.

From the U.S. we do not have any market-moving economic reports scheduled for release this week. The ISM Non-Manufacturing index is due for release today at 15:00 UTC but given the fact that NFP numbers have been released before the report, it should be of less importance.

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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

 

 

 

Quiet Trading Over US Thanksgiving Holiday?

Dear Traders,

The market’s sentiment was recently strongly influenced by political events and while political risks in the Eurozone continue to build up, the euro went into a tailspin. With the Italian constitutional referendum coming in on December 4, the situation for the euro may deteriorate as political risks are rising across Europe.

Trump’s win seems to have reinvigorated populist sentiment across the continent and if the UK can Brexit, the US can elect Trump, it is also possible that France and Italy could pull out of the EU. In this uncertain political environment, the euro remains vulnerable to losses. However, bearing in mind that the euro is oversold in short-term time frames, we expect some corrections in the EUR/USD.

The economic calendar this week is rather light in terms of market-moving data. The U.S. Thanksgiving holiday on Thursday usually leads to low liquidity in the market, which is why we do not expect significant market movements this week. The only interesting piece of U.S. data will be Durable Goods Orders on Wednesday followed by the FOMC Meeting Minutes which are expected to confirm the hawkish tilt of the Federal Reserve. Everything else than a Fed rate hike next month would be a big surprise.

From the Eurozone, we have the PMI Report (Wednesday) and the German IFO Report (Thursday) due for release this week. Furthermore, ECB President Mario Draghi speaks at the European Parliament in Strasbourg today at 16:00 UTC.

Technically we expect the EUR/USD to trade between 1.07 and 1.0530 in the near-term while a break above 1.0720 may invigorate some bullish momentum towards 1.0770 and 1.08 whereas a break below 1.0520 would increase the pressure on the currency pair.

GBP/USD

The pound sterling dropped towards 1.23 and sterling bears are eager to see whether the cable will break below that crucial support. After a break below 1.23 we see a next lower target at 1.2150. A break above 1.2550 however, would shift the bias in favor of the bulls.

chart_gbp_usd_daily_snapshot21-11-16

From the U.K. , the only interesting piece of economic data will be the Autumn Budget Statement (Wednesday) and Friday’s GDP Report.

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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

Yellen Confirmed Rate Hike Expectations But Watch Out For Corrections Now

Dear Traders,

And the winners were once again: Dollar bulls. However, it was no surprise that the dollar further strengthened after Federal Reserve Chair Janet Yellen signaled the likelihood of a December rate hike. She said that a rate increase “could well become appropriately relatively soon”, giving investors the green light to expect a move next month. Yellen cautioned that the Fed did not want to wait “too long”. Regarding the future economic outlook under Trump she said that policy makers “don’t know what’s going to happen” and that the Fed “will be watching the decisions that Congress makes and updating their economic outlook as the policy outlook becomes clearer”.

In a nutshell, the Fed remains on track to raise interest rates as Trump’s election has not altered the central bank’s short-term plans whereas in the future, “there’s a great deal of uncertainty”.

From a technical perspective, we all know that a rate increase is being well priced in BUT with more than three weeks to go before the FOMC rate decision in mid-December the dollar is clearly overbought, making corrections more likely in the near-term.

EUR/USD

The euro trades in a well-defined downward channel and based on that channel the euro might tend to drop towards 1.0525 before it corrects some losses. But be careful: The pair is oversold and we should now expect upcoming corrections towards 1.07 and 1.0750.

chart_eur_usd_4hours_snapshot18-11-16

The technical picture in the GBP/USD has not changed much. After dipping below 1.24 sterling bears will have to wait for a significant break below 1.2330 and further 1.23.

There are no economic reports scheduled for release today. The only interesting event for euro traders could be Draghi‘s speech at the Euro Finance Week in Frankfurt scheduled at 8:30 UTC.

We gained again a good profit this week and wish everyone a beautiful weekend.

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts http://www.maimar.co/category/daily-signals/

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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