Overall, yesterday’s trading was not to our liking with the euro remaining confined to its three-week range between 1.0640 – 1.05 and the cable trading choppily in between our daily entry levels. In a nutshell, there was more to lose than to win from an unsteady market environment.
The euro benefited from a positive assessment of the euro-area economy while the ECB’s monetary policy stance has not fundamentally changed. The ECB statement came in as expected while Mario Draghi said downside risks to the euro zone economy were less pronounced. Even if the next change from the ECB will be towards removing accommodation and not adding stimulus, it is still too early for a shift in monetary policy.
The EUR/USD rose to a high of 1.0615 and that was it. The price development remained relatively moderate and major market moves are still lacking. The short-term bias has slightly changed in favor of the bulls but it is the appetite for U.S. dollars that will dictate the price action and thus, traders are eagerly waiting for the March Non-farm Payrolls to determine direction.
The GBP/USD was moving sideways between 1.2195 and 1.2135. Unfortunately, our entries were placed on top and below that sideways trading range. Therefore we have been struggling with false breakouts. U.K. Industrial production is due for release at 9:30 UTC but this report will take a backseat to the highly anticipated NFP report.
Today’s U.S. jobs report is the last top event risk before the Fed meeting next week. A healthy report is widely expected but the expectations are very high. Hence, there is a risk of disappointment, which would carry a higher impact than an upbeat report.
We wish you good trades and a beautiful weekend.
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