The best performing currency on Tuesday was the U.S. dollar which strengthened against the euro and British pound, providing short traders in both EUR/USD and GBP/USD good profits.
Federal Reserve Chairman Jerome Powell played down the risk that economic growth would spur unwanted inflation in yesterday’s testimony. He noted that policy must remain accommodative for now. Powell and Secretary Janet Yellen will testify together again today in front of the Senate Banking Committee.
GBP/USD
We saw the cable breaking below the lower bound of its recent sideways range and dropping towards 1.3670. Now that the pair broke below 1.3750, we anticipate further losses towards 1.3620 and possibly even 1.3570. The area between 1.3870 and 1.39 on the upside could now serve as a lower resistance.
EUR/USD
The pair slid into the current support zone at around 1.18. The euro could possibly extend its losses towards 1.1770 before we see some rebound. For the chances to shift in favour of the bulls we recommend waiting for a break above 1.1920.
DAX
After several days of unprofitable fluctuations, we were finally able to benefit from the index’s volatile swings yesterday. We first booked a profit with the DAX falling towards 14500 while a later buy order towards 14700 also proved profitable. Remaining between 14670 and 14480 could confirm a bull flag within the DAX’s overall uptrend.
Earlier this morning we went short and reached our profit target at exactly 14520.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.