Increased Risk Appetite On Fed Speculations And Eased Brexit Concerns
MaiMarFX | May 25, 2016 06:42AM ET
While the British pound rose on eased concerns about a potential Brexit scenario, the euro fell victim to renewed U.S. dollar strength. The greenback was supported by the shift of the market's rate hike expectations in favor of a Fed June or July hike.
Given the Fed's hawkish monetary policy stance, further dollar gains are increasingly likely in the near term.
Sterling strengthened on a poll showing the campaign to keep Britain in the EU is gaining ground. Sterling traders should be careful however, as uncertainty ahead of the referendum will dominate the price action in the cable. Although the risks of Brexit have diminished, the currency remains vulnerable to volatile swings to either side.
GBP/USD
On the upside, we expect the 1.47 resistance to be a short-term barrier for the pound. If the currency pair is able to break above 1.4665, we might see a rise towards 1.47 and 1.4715. On the downside, the 1.4550-area could lend a short-term support to the cable, while a next lower target could be at 1.45.
EUR/USD
We see the euro trading within a secondary downward channel with a current upper bound at 1.12 and a current lower bound at 1.1085. Above 1.1240, chances are that the euro heads for a test of 1.13 and maybe 1.1350. However, below 1.1070 a next crucial support could be at 1.1050.
Euro traders should keep an eye on the German IFO survey, scheduled for release at 8:00 UTC. From the U.S., the Services PMI due at 13:45 UTC and Crude Oil Inventories at 14:30 UTC are second-tier reports, which are expected to have only a minor impact on the USD.
Here are our daily signal alerts:
EUR/USD
Long at 1.1171 SL 25 TP 30-40
Short at 1.1124 SL 25 TP 20, 40
GBP/USD
Long at 1.4665 SL 25 TP 20, 40
Short at 1.4579 SL 25 TP 20, 50
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.