The euro traded lower against the U.S. dollar Tuesday as the divergence in monetary policy between the ECB and the Federal Reserve puts further pressure on the EUR/USD. Investors are curious about the ECB's plans to expand its monetary stimulus program. President Mario Draghi confirmed the ECB's dovish bias in his speech yesterday, saying that officials will reexamine the need for additional stimulus in December.
The British pound, however, refused to trade below 1.54 ahead of tomorrow's inflation report. Sterling traders must still be patient and wait for bigger moves until Thursday. Today's U.K. PMI numbers, scheduled for release at 9:30 GMT, will be interesting to watch. Stronger numbers could drive GBP towards the area of 1.5465 or even higher toward a retest of 1.55.
The most important piece of data will be ADP Employment Change (13:15 GMT) and ISM Non-Manufacturing (15:00 GMT). Market participants will watch these reports closely in order to get a better picture of what to expect from the payrolls report, even if data does not necessarily reflect the final outcome of non-farm payrolls. Given the current uncertainty, the market may react strongly when data is due for release.
The market's focus is also on Fed speak. Fed chair Yellen is due to speak at 15:00 GMT.
EUR/USD
We see a descending triangle in the hourly chart. This pattern could predict upcoming bearish momentum in the short-term. Below 1.0935, euro bears could drive the pair for another test of 1.09. Above 1.0970, the focus will shift to the 1.10-mark again.
Here are our daily signal alerts:
Daily Forex Signals:
EUR/USD
Long at 1.0982 SL 25 TP 40
Short at 1.0935 SL 25 TP 40
GBP/USD
Long at 1.5470 SL 25 TP 35
Short at 1.5370 SL 25 TP 40
Daily Signal- performance in pips:
November 2015
EUR/USD: +28 pips
GBP/USD: -52 pips
October 2015: EUR/USD: +257 pips, GBP/USD: -107 pips
September 2015: EUR/USD: -79 pips, GBP/USD: +236 pips
August 2015: EUR/USD: +319 pips, GBP/USD: +61 pips
July 2015 (01.07. – 16.07.): EUR: +106 pips, GBP: -123 pips
June 2015: EUR/USD: -169 pips, GBP/USD: +134 pips
May 2015: EUR/USD: -16 pips, GBP/USD: -99 pips
April 2015: EUR/USD: +153 pips, GBP/USD: +392 pips
March 2015: EUR/USD: +510 pips, GBP/USD: +275 pips
February 2015: EUR/USD: +360 pips, GBP/USD: +155 pips
January 2015: EUR/USD: +240 pips, GBP/USD: +200 pips
December 2014: EUR/USD: +405 pips, GBP/USD: +230 pips
November 2014: EUR/USD: + 135 pips, GBP/USD: + 190 pips
October 2014: EUR/USD: + 255 pips, GBP/USD: +390 pips
September 2014: EUR/USD: + 336 pips, GBP/USD: + 424 pips
Signal success rate: EUR/USD: 63 %, GBP/USD: 54 %
We wish you good trades and many pips!
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