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U.S. Dollar Continues Slide After Trump State Of The Union Speech

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Dear Traders,

Turn-around Tuesday lived up to its name and we got what we were looking for: A reversal of the dollar’s short-lived recovery and a very good daily and monthly profit. The U.S. dollar is being sucked into the maelstrom triggered by the ‘America First’ agenda of the Trump administration. As for the depreciation of the greenback and the long-term outlook, we can point out that the protectionism move will negatively influence the world’s largest economy.

The dollar extended its slide after U.S. President Trump’s State of the Union speech. As expected, Trump sought to strike a positive tone and described a “New American Moment” of wealth and opportunity. Trump called on Congress to pass a 1.5 trillion infrastructure-spending plan but this campaign promise was widely expected by the markets. Thus, the dollar’s reaction to his speech was muted.

EUR/USD

The euro recovered some of its losses after the 1.2330-support proved intact. Now that the single currency has stabilized above 1.24 we could see another test of 1.2450, a short-term resistance in the EUR/USD. If the euro finds its way above 1.2460 we expect further gains towards 1.25 and possibly even 1.2650.

The British pound started a relief rally after the psychological support at 1.40 has been tested. If the pound climbs above 1.4210 we may see a rise towards 1.43 but this depends on the risk appetite and demand for dollars ahead of the FOMC decision.

The next upcoming risk event will be the FOMC rate decision at 19:00 UTC but no changes are expected. It will be Janet Yellen’s last FOMC meeting before her term ends in February.

Before coming to the FOMC decision, we will keep an eye on the Eurozone Consumer Price report, due at 10:00 UTC, followed by the ADP report at 13:15 UTC.

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Pound Jumps On Brexit Hopes

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Dear Traders,

Many wondered yesterday what happened to the pound as it jumped more than 150 pips after falling to a weekly low of 1.3220. The high volatility was triggered by reports that the U.K. and E.U. have agreed a deal over the U.K.’s Brexit divorce bill, achieving a breakthrough in Brexit talks. The pound experienced high volatile swings in the wake of these reports and, unfortunately, some of our yesterday’s trades became victims of high volatility.

The GBP/USD could now head for a test of the 1.34-threshold and if the 1.3450-level is breached on the upside we could see sterling rallying towards 1.36. As for the bears, the bearish momentum came to an abrupt end yesterday and it will be difficult to only focus on the technical picture as the pound is mainly affected by Brexit talks.

The EUR/USD traded lower and that bearish bias can be attributed primarily to the demand for U.S. dollars. The Senate tax cut proposal advanced out of committee and toward a floor vote. With the tax reform moving closer towards realization we expect the greenback to receive a further boost. Ongoing concerns about North Korea however, seem to play a minor role for the dollar.

EUR/USD

The single currency faces a crucial support around 1.18 and if this barrier gives way to fresh bearish momentum we could see the euro falling back towards 1.1720. If 1.18 however holds, we anticipate a potential run for 1.20.

What will be important today?

The German Consumer Price Index will be release at 13:00 UTC but this report is not expected to have a major impact on the euro. From the U.S. we have revisions to the third quarter GDP scheduled for release at 13:30 UTC followed by Yellen’s appearance before the Congress at 15:00 UTC.

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Monetary Policy Speak And U.K. CPI Data Could Boost Risk Appetite

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Dear Traders,

The price trend in both GBP/USD and EUR/USD remains disappointing overall. The price of the euro has barely changed with the currency pair still oscillating around 1.1670. The British pound found some halt near 1.3060 and ended the trading day above 1.31.

The lethargic market situation might soon come to an end as market participants brace for higher volatility ahead of today’s upcoming high-profile event. The Heads of the European Central Bank, Federal Reserve and Bank of England are scheduled to speak on a panel in Frankfurt at 10:00 UTC. Chances are slim that policymakers will reveal anything new that the market does not already know but traders should prepare for heightened volatility around this event. If none of today’s speakers touches on monetary policy, the round table discussion will be a non-event for traders.

Shortly before that, sterling traders will pay close attention to the U.K. Consumer Price Report at 9:30 UTC. If inflation data beats expectations the pound could soar towards 1.32 and 1.3250. On the bottom side we will wait for a break below 1.3020 and more importantly 1.30.

EUR/USD

In short-term time frames the euro seems to be primed for an upside breakout. If the price climbs above 1.1680 we may see some bullish continuation towards 1.1715/25. For bearish momentum to accelerate the single currency must significantly drop below 1.1640.

 

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Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

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U.S. Dollar Strengthens, Trump Tax Plan Back In Focus

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Dear Traders,

The U.S. dollar strengthened against its major counterparts as comments from Federal Reserve Chair Yellen and President Trump bode well for some renewed upward momentum in the greenback. Yellen boosted expectations for a rate hike in December, saying the Fed “should be wary of moving too gradually” in its rate hike cycle. The Fed does not want to surprise markets when raising rates earlier than expected and while the probability of what the market is currently pricing in is still a little bit too low, Yellen seeks to prepare markets for another rate increase this year.

Moreover, the greenback received some boost from Trump’s comments on the long-awaited tax plan. Recent comments included lowering the corporate tax rate to 20 percent from 35 percent while the individual tax rate should be lowered to 35 percent. However, full details of the tax plan have yet to be revealed. Trump is expected to announce his tax overhaul plan today during a speech in Indiana.

Furthermore, U.S. Durable Goods Orders are scheduled for release at 12:30 UTC but this report is not expected to have a major impact on the USD.

From a fundamental perspective, the dollar trade might be preferable now but traders should also pay attention to the technical picture in order to confirm the current forecast.

EUR/USD

The euro dropped below an important support area at 1.1830-1.18. As long as the pair remains well below 1.1830, we expect further losses towards 1.1730 and possibly even 1.1680. For the euro to regain some strength it would need a renewed break above 1.1865 and further 1.19. A resistance is seen at around 1.1970.

The British pound was able to hold above 1.34. If GBP/USD breaks below 1.3380 we anticipate further losses. A current resistance is however seen at 1.3550.

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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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Euro Drops Below $1.18

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Dear Traders,

The euro weakened against the U.S. dollar in the aftermath of the German election results while the important support area around 1.1830-1.18 remained unbroken until this morning. As mentioned in our yesterday’s analysis, for the bullish bias to diminish the euro must break below 1.1830/20, the neckline of a head-shoulders pattern that was formatted since late August. Below 1.1820 we will focus on a lower target at 1.1775, from where potential pullbacks may occur. A current resistance is however seen at 1.1990.

Today’s focus shifts to comments from central bank policy makers with most attention being paid to Fed Chair Yellen who is scheduled to speak on inflation, uncertainty and monetary policy at 16:45 UTC.

Elsewhere, the war of words between the U.S. and North Korea continues to pose a threat to the markets. While the market shrugs off escalating tensions between America and North Korea, the recent escalation in rhetoric raises risk of tactical missteps.

The British pound extended its recent slide against the greenback and fell to a low near 1.3430. The latest weakness phase of the pound can still be considered as consolidation within the overall uptrend but if GBP/USD falls below 1.3380 we anticipate further losses towards 1.3330 and possibly even 1.32. On the topside, we will wait for a break above 1.36 in order to focus on higher targets at 1.37.

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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

EUR/USD & GBP/USD: Range-Bound Price Action

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Dear Traders,

There was nothing to gain for traders of the EUR/USD and GBP/USD Monday with both major currency pairs trading flat within tight trading ranges. The euro took a brief glimpse above 1.1210 but was unable to hold above that level. The cable however, traded choppily sideways between 1.2760 and 1.2705 while none of our daily signal entries provided a sustained profit.

Market participants will now focus on an address by Fed chair Yellen at 17:00 UTC. If she does not touch on monetary policy, her speech could have very little impact on the U.S. dollar. During the European trading session, monetary policy and financial stability will remain in focus with Bank of England Governor Carney due to speak at 10:00 UTC.

Furthermore, U.S. Consumer Confidence is scheduled for release at 14:00 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

 

 

 

GBP/USD: U.K. Inflation Report To Dictate Price Action

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Dear Traders,

While the U.S. dollar ended the day virtually unchanged against the euro, it traded slightly lower versus the British pound Monday. Meanwhile, there were no new insights from Federal Reserve Chair Janet Yellen. She reiterated several previously stated positions when speaking at the University of Michigan. Yellen said she expected the U.S. economy to continue to grow at a moderate pace and that gradual interest rate increases “can get us where we need to be”. Fed policy makers expect two additional rate hikes in 2017.

The British pound recovered some losses and rose towards 1.2430. However, as long as the pound remains below 1.2450/70, we favor a bearish stance. For sterling to rally it would possibly require a break above 1.2480 and further 1.2505. Today’s price action will hinge on the U.K. inflation report, scheduled for release at 8:30 UTC. If Consumer Price growth comes in with a downtick, sterling could fall towards 1.2340. Stronger inflation however, may encourage sterling bulls to push the currency beyond the 1.2470-level.

The euro trod water with the price reluctant to push above the 1.06-mark. Euro traders remain risk-averse ahead of the French elections and with no market-moving data on the calendar, the euro might continue to trade sideways within tight trading ranges. The German ZEW Survey is scheduled for release at 9:00 UTC but this report cannot be considered important enough to free the euro from its lethargy. In short-term time frames we expect the euro’s price action to be limited to a trading range of 1.0640 and 1.0530.

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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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Can Euro And Pound Hold Onto Their High Levels?

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Dear Traders,

The U.S. dollar fell to its lowest level since November as investors assessed the U.S. administration’s ability to push through promised tax cuts and infrastructure spending. That, in turn, raises doubts as to whether the Federal Reserve can raise interest rates as aggressively as had been priced in. Fed chair Janet Yellen will speak today at 16:50 UTC and dollar bulls fear that fiscal uncertainty may discourage Fed officials from taking an aggressive stance towards higher rates. In case Yellen’s tone is more cautious, the dollar could tend to fall.

Apart from Yellen’s speech, U.S. Advance Goods Trade Balance (12:30 UTC) and Consumer Confidence (14:00 UTC) are scheduled for release.

The euro broke above 1.0870 and extended its gains to a high of 1.0906. In case of a renewed break above 1.0875 we expect further bullish momentum, sending the euro higher towards 1.0920/50. A current support is however seen at around 1.0820.

The pound sterling marked a fresh high at 1.2615 while sterling traders have shrugged off tomorrow’s Brexit trigger. On Wednesday, U.K. Prime Minister Theresa May will formally trigger the start of two years Brexit negotiations and while this event poses a risk to the currency the British pound remained stable around 1.2550. Nonetheless, we expect the upward movement to be limited to 1.2650 in short-term time frames. The pound may tend to test that resistance area before we will see any major pullback.

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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

 

 

There Is No Reasonable Explanation For The Dollar’s reversal

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Dear Traders,

It seemed as if dollar bulls just sought an excuse for taking profits on dollar positions after the U.S. dollar rose to new highs on evidence of firming inflation. Whereas for the U.S. all signs are pointing to higher inflation and thus, higher interest rates and a stronger dollar, there was no reasonable explanation for the sharp reversal of the USD towards the end of the trading day. During the House Financial Services Committee hearing, conservatives Republicans pressed Fed Chair Janet Yellen to concede that economic growth is still disappointing and that the Fed has failed to fix underlying problems. For the most part, Yellen’s tone was positive, defending the Fed’s efforts that had contributed to strong job growth. The only negative point during the hearing was that Yellen acknowledged that economic growth has been “quite disappointing”. This seemed to be the reason for the weakening dollar in short-term time frames.

The EUR/USD traded higher, heading towards 1.0630 and it will now be interesting whether the 1.0660-resistance is going to hold. If the euro breaks through 1.0665/70 we expect accelerated bullish momentum towards 1.0710 and possibly even 1.0750. A current support area is however seen at 1.0580-60. If the euro falls back below 1.0560 it could extend its losses towards 1.0510.

The pound sterling ended the trading day virtually unchanged against the greenback. A break above 1.2520 could boost bullish momentum but we bear in mind that the barrier at 1.2550 is still unbroken. Crucial support levels are seen at 1.2350 and 1.2310 and as long as the pound remains firmly above these zones we will rather focus on higher price levels.

There are no major economic reports scheduled for release today and those of you who have already made a good profit this week, shall better not reinvest their profits.

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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

 

 

 

Yellen Confirmed Rate Hike Expectations But Watch Out For Corrections Now

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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 https://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