While we actually got the breakouts what we have been looking for, the market's fluctuations proved to be limited to either side on Monday. Sterling traders were able to pocket some profits with both long and short-entries whereas euro traders still struggle with the euro's poor performance. The EUR/USD fluctuated between 1.1075 and 1.1015 yesterday and neither our sell attempt nor a later buy order provided a sustained profit. Consequently, euro traders will need some more patience and wait until market conditions improve.
The pound sterling climbed above 1.31 as the leadership certainty in the U.K. provided some relief for the currency. Theresa May will be appointed as Britain's next prime minister and even though May will have to resist pressure to rush into the Brexit negotiations, Britain's second female prime minister is not seen in a hurry to trigger Article 50, the formal start of an EU exit.
In the meantime, it is going to be a big week for Bank of England Governor Mark Carney, who faces the U.K. parliament's Treasury Select Committee today at 10:00 UTC, ahead of Thursday's interest rate decision. Economists expect the BoE to cut rates by 25 basis points, which would be the first rate cut since 2009. With this in mind sterling is expected to remain under pressure ahead of Thursday's monetary policy decision.
Furthermore, two Fed officials are scheduled to speak today around 14:00 UTC, which could influence the dollar's performance as long as they maintain a hawkish stance. The euro rose above 1.11 but the technical picture has not changed significantly. As long as the euro remains below 1.1170 we favor a bearish stance targeting at 1.0970. However, a significant break above 1.1190 could shift the bias in favor of the bulls.
Here are our daily signal alerts:
EUR/USD
Long at 1.1121 SL 25 TP 30-40
Short at 1.1045 SL 25 TP 40, 60
GBP/USD
Long at 1.3110 SL 25 TP 35-40
Short at 1.2970 SL 25 TP 30, 60
We wish you good trades and many pips!
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