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

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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Fasten Your Seat-belts For The Last Big Week Of The Year

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Pound Jumps On Brexit Hopes

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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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

 

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

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

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.

www.maimar.co

Euro Drops Below $1.18

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.

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 2017 Maimar-FX.

www.maimar.co