GROWTHACES.COM Forex Trading Strategies:
Taken Positions
EUR/USD: long at 1.0915, target 1.1180, stop-loss 1.0780, risk factor *
GBP/USD: long at 1.4820, target 1.5000, stop-loss 1.4740, risk factor ***
USD/JPY:short at 119.40, target 117.50, stop-loss 120.40, risk factor ***
USD/CAD: short at 1.2650,target 1.2350, stop-loss moved to 1.2530, risk factor ***
AUD/USD: long at 0.7565, target 0.7930, stop-loss moved to 0.7640, risk factor ***
NZD/USD: long at 0.7500, target 0.7930, stop-loss moved to 0.7500, risk factor ***
EUR/CAD: long at 1.3650, target 1.3900, stop-loss 1.3520, risk factor *
AUD/JPY: long at 90.75, target 93.00, stop-loss moved to 91.35 , risk factor ***
Pending Orders
USD/CHF: sell at 0.9670, if filled – target 0.9300, stop-loss 0.9810, risk factor **
EUR/GBP: buy at 0.7270, if filled - target 0.7450, stop-loss 0.7190, risk factor *
AUD/NZD: sell at 1.0260, if filled – target 1.0000, stop-loss 1.0380, risk factor ***
EUR/USD: Strong USD Weigh On U.S. Economy
(long at 1.0915, target 1.1180)
- The U.S. economy added only 126k jobs in March vs. market expectations for 245k. The unemployment rate remained at 5.5%. Job gains in February and January were revised down by 69k.
- The ISM services index fell to 56.5 last month from 56.9 in February. The reading was in line with expectations. The March reading was the lowest since December.
- New York Fed President William Dudley (a permanent voting member of the Fed's policy panel) said the timing of the Federal Reserve's interest rate hike is unclear and for now policymakers must watch that the U.S. economy's surprising recent weakness does not signal a more substantial slowdown. Dudley did not repeat his refrain that a rate hike could reasonably be expected to come by mid-2015. He added that the a rate hike would come once the labor market improves more and when policymakers are reasonably confident that low inflation will return to a 2% goal. In his opinion the strong USD will continue to hurt U.S. trade performance, and has already shaved an estimated 0.6 percentage point from overall 2015 growth.
- Eurozone PMI composite rose to 11-month high and amounted to 54.0, slightly below the flash reading of 54.1 and higher than 53.3 in February. The expansion of economic activity in March was evenly spread across the manufacturing and service sectors. Manufacturing production rose at the fastest pace since May 2014, while service sector activity increased at the sharpest rate for eight months.
- Growth of new business in the euro area likewise accelerated in March, hitting a near four-year record. Employment rose at the quickest pace since August 2011. March saw deflationary pressures ease, as average prices charged declined at the slowest rate since last August and input costs showed the largest monthly increase for eight months.
- The PMI suggests Eurozone GDP growth of 0.3% in the first quarter 2015. The survey data suggests also that the pace of expansion looks set to gather pace in coming months – high inflow of new business and rising demand for staff.
- The EUR/USD jumped on Friday after weak U.S. non-farm payrolls. Today the impact of the U.S. jobs data appears to be fading. However, Eurozone macroeconomic data are getting stronger and probability of more dovish Fed due to weaker U.S. economic figures is getting higher. That is why we still expect EUR/USD to rise in the medium term against extremely EUR-bearish market expectations. We took profit on our previous EUR/USD long position (1.0820-1.1000) and got long again yesterday at 1.0915. Our next target is 1.1180.
Significant technical analysis' levels:
Resistance: 1.1052 (high Mar 26), 1.1062 (high Mar 18), 1.1115 (high Mar 5)
Support: 1.0864 (low Apr 3), 1.0802 (low Apr 2), 1.0777 (21-dma)
GBP/USD Lower Despite Strong Britain's PMI Data
(long for 1.5000)
- Britain’s PMI surged to hit an eight-month high of 58.9 in March, up from 56.7 in February, pointing to a speeding up of overall economic growth in the first three months of 2015. The index suggests that Britain's GDP probably rose by a quarterly 0.7% qoq the first three months of 2015, up from 0.6% qoq growth in the fourth quarter last year.
- PMI showed also that input cost inflation remained historically muted in May, despite evidence of rising wage pressures. A number of firms commented that the weaker EUR had dampened inflationary pressures during the month.
- In our opinion the outlook on the GBP/USD is slightly bullish. However, the GBP is still under pressure of Britain's national election campaign and the uncertainty around the outcome of a vote that will take place on May 7. We stay long for 1.5000.
Significant technical analysis' levels:
Resistance: 1.4981 (high Apr 6), 1.4995 (high Mar 26), 1.5008 (high Mar 19)
Support: 1.4812 (low Apr 3), 1.4775 (low Apr 2), 1.4742 (low Apr 1)
AUD/USD Jumped On RBA Decision, In Line With Our Expectations
(stay long for 0.7900)
- Australia's central bank kept interest rates steady for a second month today against market expectations for a cut, but in line with our forecast. The Reserve Bank of Australia Governor Glenn Stevens said: “Further easing of policy may be appropriate over the period ahead. The Board will continue to assess the case for such action at forthcoming meetings.”
- A pause would allow policy makers to peruse key inflation figures for the first quarter due on April 22. In our opinion a cut in May is much more probable than a cut today, as it would also allow the RBA to expand on its reasoning in its quarterly statement on monetary policy, a weighty economic outlook due just three days later.
- However, our baseline scenario is that the RBA will not change rates this year, as there are a lot of promising signs of economic recovery. The Australian Bureau of Statistics said retail sales rose 0.7% in February, well ahead of forecasts of a 0.4% increase, while January was revised up. Industry figures showed sales of new vehicles in both March and February were the strongest on record for those two months. Sales for March alone were 8% higher yoy. Low rates are also stoking investor demand for housing in Sydney, with prices up over 13% yoy, according to figures from property consultant RP Data.
- The AUD jumped above 0.7700 after the Reserve Bank of Australia left interest rates on hold, prompting a wave of short-covering. We stay AUD/USD long. However, there are some important resistance levels in this area: 21-dma at 0.7701 and 10-dma at 0.7729.
- AUD/USD investors will focus now on Wednesday’s U.S. FOMC minutes.
Significant technical analysis' levels:
Resistance: 0.7701 (21-dma), 0.7710 (hourly high, Apr 7), 0.7729 (10-dma)
Support: 0.7571 (low Apr 3), 0.7534 (low Apr 2), 0.7451 (low May 18, 2009)