Dear Traders,
The U.S. dollar advanced against its major peers on the back of solid U.S. data and hawkish comments from Federal Reserve officials. Fed Chair Janet Yellen sounded optimistic at her testimony saying that a December rate hike would be a "live possibility" if data continue to point to growth and stronger inflation. In other words, as along as Friday's employment report confirms the positive prospects for the U.S. economy, the odds for a liftoff next month are good.
The euro dropped toward 1.0844, not far from its next important support area at 1.08. Whether if we will see further bearish momentum will mainly hinge on the greenback's performance and thus on the payrolls report. The 1.08-level could act as a key support for the EUR/USD and once this level is breached to the downside, a next support is seen at 1.0710 and 1.0660. We do not expect big moves in the EUR/USD today. Market participants could trade cautious ahead of tomorrow's NFP data which may lead to consolidated moves between 1.0960 and 1.0830/15.
The cable was only little affected by the dollar's strength. Sterling traders are awaiting bigger moves today. The Bank of England is due to release its Inflation report alongside its monetary policy decision and MPC minutes at 12:00 GMT. While no changes in monetary policy are expected, the focus will be on upgraded economic forecasts and the MPC statement.
GBP/USD
Taking a look at the daily chart we see a symmetrical triangle which increases the chances of an upcoming breakout in either side. GBP is currently trading between 1.5445 and 1.5360. Above 1.5450 sterling bulls may attempt to push the pair through 1.55 but a clear buy signal is only provided with prices above 1.5510. On the bottom side we will first focus on a break of 1.5360, a level which has proved to be a current support for GBP. Based on the triangle, further sell orders could be attractive below 1.5280/70.
It should be an interesting and high volatile trading day for GBP/USD. Let's be surprised.
Further second-tier data for today:
10:00 EUR Eurozone Retail Sales
13:30 USA Continuing and Initial Jobless Claims
Here are our daily signal alerts:
Daily Forex Signals:
EUR/USD
Long at 1.0880 SL 25 TP 30-35
Short at 1.0840 SL 25 TP 30-35
GBP/USD
Long at 1.5415 SL 25 TP 30, 80
Short at 1.5360 SL 25 TP 40, 90
We wish you good trades and many pips!
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