GROWTHACES.COM Forex Trading Strategies
Taken Positions
USD/JPY: long at 123.70, target 125.80, stop-loss 122.90, risk factor *
Pending Orders
EUR/USD: sell at 1.1060, target 1.0810, stop-loss 1.1130, risk factor *
USD/CHF: buy at 0.9610, target 0.9810, stop-loss 0.9550, risk factor *
USD/CAD: buy at 1.3040, target 1.3260, stop-loss 1.2940, risk factor *
AUD/USD: sell at 0.7550, target 0.7250, stop-loss 0.7660, risk factor *
NZD/USD: sell at 0.6660, target 0.6405, stop-loss 0.6740, risk factor *
GBP/EUR: sell at 0.7070, target 0.6905, stop-loss 0.7120, risk factor *
EUR/CHF: buy at 1.0540, target 1.0795, stop-loss 1.0470, risk factor *
GBP/JPY: buy at 192.90 , target 196.40, stop-loss 191.80, risk factor **
AUD/NZD: buy at 1.1050, target 1.1300, stop-loss 1.0980, risk factor **
GBP/USD Slightly Weaker After Construction PMI, But Market Awaits BOE
(stay sideways)
- The monthly construction PMI fell to 57.1 after hitting a four-month high of 58.1 in June. The reading was below market expectations for a rise to 58.4. Commercial activity was a key growth driver during July, which partly offset ongoing weakness in civil engineering and softer residential building trends.
- The GBP has been underpinned in recent weeks by mostly robust data out of Britain, with consumer demand holding up well and the pace of growth accelerating in the second quarter. Bank of England Governor Mark Carney has indicated a decision on rates will come around the turn of the year. All eyes are on Thursday when the Bank of England will release its quarterly inflation report, its rate decision and the minutes of the policy meeting where the first split in the nine-member committee is expected. Investors expect at least two members to vote for a rate hike, but in our opinion three votes for a hike are likely with a chance for four votes.
- The volatility on the GBP/USD has been low recently. In our opinion no position on this pair is justified from the point of view of fundamental analysis. Technical outlook also remains mixed due to the failure ahead of 1.5701 last Wednesday – 61.8% retrace of the 1.5930-1.5330 fall. We are looking to sell EUR/GBP and buy GBP/JPY.
Significant technical analysis' levels:
Resistance: 1.5645 (high Aug 3), 1.5679 (high Jul 31), 1.5691 (high Jul 29)
Support: 1.5567 (low Aug 3), 1.5550 (low Jul 31), 1.5528 (low Jul 28)
AUD/USD: RBA Tempers Call For AUD Drop
(sell at 0.7550)
- Australia's central bank held interest rates at record lows in a widely expected decision. The Reserve Bank of Australia dropped a reference to a further decline being necessary, saying only that the Aussie was adjusting to weak commodity prices. The statement following its monthly policy meeting seemed to mark a new phase in a long campaign to talk down the currency, which hit a six-year low last week.
- RBA Governor Glenn Stevens said: “While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year.” In his opinion an expected interest rate hike by the US Federal Reserve later this year will also help the Australian economy. A September hike by the Fed would likely boost the USD, pushing the AUD/USD further lower, making locally produced goods more competitive with outside imports.
- The central bank has already eased twice this year, but the chances for further monetary easing are very low now. Glenn Stevens has recently sounded reluctant to cut again as he balances the need to underpin a sluggish economy against the risk of over stimulating an already hot housing market.
- Low rates support consumer demand for goods, services and housing. Figures from the Australian Bureau of Statistics out today showed retail sales outpaced forecasts with a rise of 0.7% mom in June. Sales for the second quarter also beat expectations with an inflation-adjusted increase of 0.8%.
- Our trading strategy for the AUD/USD is to sell at higher levels. In our opinion rising expectations for Fed hike in September should stop near-term recovery attempts.
- The next important event for the AUD traders will be the release of employment data on August 6, 1:30 GMT. Our forecast is slightly below the market consensus.
Significant technical analysis' levels:
Resistance: 0.7395 (session high Aug 4), 0.7400 (psychological level), 0.7418 (high Jul 23)
Support: 0.7264 (session low Aug 4), 0.7260 (low Aug 3), 0.7234 (low Jul 31)
Source: Growth Aces Forex Trading Strategies