GROWTHACES.COM Forex Trading Strategies
Taken Positions
USD/CHF: short at 0.9290, target 0.9100, stop-loss 0.9370, risk factor **
AUD/USD: long at 0.8025, target 0.8295, stop-loss 0.7940, risk factor ***
CHF/JPY: long at 129.10, target 131.40, stop-loss 127.90, risk factor **
AUD/JPY: long at 95.60, target 98.80, stop-loss 94.60, risk factor **
Pending Orders
EUR/USD: buy at 1.1140, if filled - target 1.1450, stop-loss 1.1045, risk factor *
GBP/USD: buy at 1.5460, if filled - target 1.5800, stop-loss 1.5365, risk factor *
EUR/GBP: buy at 0.7170, if filled - target 0.7360, stop-loss 0.7090, risk factor *
EUR/JPY: buy at 133.80, if filled – target 136.50, stop-loss 133.00, risk factor *
EUR/CHF: buy at 1.0380, if filled – target 1.0580, stop-loss 1.0310, risk factor **
EUR/CAD: buy at 1.3550, if filled – target 1.3800, stop-loss 1.3470, risk factor *
GBP/JPY: buy at 185.60, if filled – target 188.40, stop-loss 184.70, risk factor **
EUR/USD Falls As ECB Signals Further Action
(stop-loss hit, buy at 1.1140)
- ECB Executive Board member Benoit Coeure said the bank would buy more securities in May and June due to low market liquidity in July and August. He said the bank may also buy more assets in September to smooth out its transactions and keep the monthly average at EUR 60 billion. He added: “I do not see the recent reversal in the price of Bunds and other sovereign bonds as a cause for concern, insofar as it reflects a market correction.”
- ECB governing council member Christian Noyer said that recent indicators suggested the ECB's quantitative easing measures had had a positive effect on inflation expectations and said the central bank was ready to take further action.
- Eurostat said consumer prices in the Eurozone rose 0.2% mom in April for a 0% yoy reading, confirming its earlier estimate. Core inflation, which excludes the most volatile components of unprocessed food and energy, rose 0.2% mom for a 0.7% yoy increase. It had initially estimated the rise at 0.6% yoy.
- Separately, Eurostat said the Eurozone’s unadjusted external trade surplus increased to EUR 23.4 billion in March from EUR 16.1 billion a year earlier as exports jumped 11% and imports rose by only 7%.
- German think-tank ZEW said its monthly survey of economic sentiment fell to 41.9 points from 53.3 in April, undershooting a consensus forecast of 49.0. A separate gauge of current conditions dropped to 65.7 points from 70.2 in April, coming in weaker than a consensus forecast for a reading of 68.0.
- Our long was stopped at 1.1250. In our opinion 21-dma and double day low at 11.31/34 is a good support and we could see a rebound from here. We have placed a buy order at 1.1140.
Significant technical analysis' levels:
Resistance: 1.1289 (10-dma), 1.1326 (hourly high May 19), 1.1453 (high May 18)
Support: 1.1135 (21-dma), 1.1131 (low May 11), 1.1067 (low May 5)
GBP/USD Hit By Deflation
(stop-loss hit, buy again at 1.5460)
- The Office for National Statistics said consumer prices fell 0.1% in April compared with the same month last year. It was the first time that the CPI came in negative since official records for the index began in 1996. Based on comparable estimates going back further, it was the first time that consumer prices showed deflation since 1960, the ONS said.
- The CPI in April was pushed down by cheaper air and sea fares which the ONS linked to the Easter holidays, when prices are usually higher, which this year fell outside the collection period for the April reading of the index. Let us remind that last year, Easter fell in the middle of the collection period, meaning the higher fares pushed up the index. That is why we have a drop in yoy terms now.
- But core inflation, which strips out increases in energy, food, alcohol and tobacco, fell in April to its lowest yearly level since March 2001 at 0.8%
- Factory gate prices fell by 1.7% in annual terms, a touch weaker than the median forecast of a 1.6% fall, a touch weaker than economists' predictions of a 1.6% fall.
- Bank of England Governor Mark Carney said last week that the central bank thought inflation could turn negative imminently, although he reiterated that prices would pick up in the coming months and interest rates were more likely to move up than down.
- Our GBP/USD long position opened at 1.5610 and broke below the support level at 1.5537 (38.2% fibo of 1.5088-1.5815 rise). The stop-loss was hit at 1.5530. However, we do not see any fundamental reasons for a trend change. We have placed another buy order at 1.5460, just above the 50% fibo of the above-mentioned move. If the order is filled we see the scope for gains towards this-month highs near 1.5800.
Significant technical analysis' levels:
Resistance: 1.5596 (200-dma), 1.5669 (hourly high May 19), 1.5745 (high May 18)
Support: 1.5498 (high Apr 29), 1.5452 (50% of 1.5088-1.5815), 1.5393 (low May 11)
Source: Growth Aces Forex Trading Strategies