GROWTHACES.COM Forex Trading Strategies
Taken Positions
EUR/USD: long at 1.0740, target 1.1000, stop-loss 1.0615
EUR/GBP: long at 0.7170, target 0.7350, stop-loss 0.7110
GBP/JPY: long at 177.20, target 179.50, stop-loss 176.20
Pending Orders
GBP/USD: buy at 1.4900, if filled - target 1.5270, stop-loss 1.4820
USD/JPY: sell at 119.35, if filled - target 117.20, stop-loss 120.20
USD/CHF: sell at 0.9590, if filled - target 0.9360, stop-loss 0.9685
USD/CAD: sell at 1.2280, if filled - target 1.2000, stop-loss 1.2380
AUD/USD: buy at 0.7730, if filled - target 0.7950, stop-loss 0.7620
NZD/USD: buy at 0.7630, if filled - target 0.7850, stop-loss 0.7520
EUR/JPY: buy at 127.40, if filled - target 130.00, stop-loss 126.30
CHF/JPY: buy at 123.75, if filled - target 126.20, stop-loss 122.60
AUD/JPY: buy at 91.80, if filled - target 94.00, stop-loss 90.80
EUR/USD: Long At 1.0740, Target 1.1000
(long for 1.1000)
- European Central Bank President Mario Draghi said: „We all want Greece to succeed. The answer is in the hands of the Greek government. Much more work is needed now and it is urgent. We want to reach a comprehensive policy package within which the policy priorities of the Greek government can be carefully assessed, a debt sustainability analysis can be made and a figure for the budget surplus can be determined.”
- Draghi added also that the exchange rate was not a policy target and was the outcome of different business cycles and different monetary policies. In his opinion “it is pointless to go short on the EUR.”
- The EUR was weak across the board on Monday with Athens stuck in negotiations with its Eurozone partners and the International Monetary Fund over reforms required by its lenders to unlock remaining bailout funds as it is rapidly running out of cash. Recent news suggest that a solution is rather unlikely at the April 24 meeting of Eurogroup finance ministers in Riga.
- We went long on the EUR/USD at 1.0740 on Friday. The rate opened the week near 1.0820 but fell soon near the entry level of our position. The start of the week and the 21-dma of 1.0801 provide resistance. The FX market is rather ignoring latest chapter of Greek sovereign debt drama. However, this is still an important risk factor to our long EUR/USD position.
Significant technical analysis' levels:
Resistance: 1.0801 (21-dma), 1.0824 (session high Apr 20), 1.0848 (high Apr 17)
Support: 1.0738 (low Apr 17), 1.0711 (10-dma), 1.0623 (low Apr 16)
USD/JPY: Japan's Government Leaves Economic Assessment Unchanged
(sell at 119.35)
- Japan's government kept its overall assessment of the economy unchanged on Monday, noting a moderate recovery trend as factory output is picking up on the back of improving corporate activity. In its monthly economic report, the government also kept unchanged its assessment of consumer spending, capital expenditure and exports, as the economy stabilises after a recession unexpectedly caused by a sales tax hike last April. The report comes ahead of a closely watched Bank of Japan meeting on April 30 where the central bank will update its forecasts for consumer prices and inflation.
- BOJ Deputy Governor Hiroshi Nakaso said earlier this month that a downgrade to the central bank's CPI forecasts will not be enough to trigger additional easing. Economics Minister Akira Amari and other government officials have also indicated that the current slowdown in inflation is beyond the BOJ's ability to control because it stems from lower oil prices.
- Bank of Japan Governor Haruhiko Kuroda said on Sunday that financial markets could be surprised if the central bank hits its 2% inflation target in 2016 and interest rates in Japan start to rise as a result. Kuroda said the BOJ expects inflation in Japan to gradually accelerate later this year as the impact of lower oil prices becomes less of a factor in the data.
- The monthly Tankan survey showed that confidence among Japanese manufacturers slid for the first time in three months in April. Sentiment index for manufacturers fell to 12 in April from 16 in the prior month. However, the service-sector index rose to 25 from 21 in March, led by sectors such as retailers, real estate, construction and information, communications.
- We are looking to go short on the USD/JPY at 119.35. If the order is filled, the target will be 117.20.
Significant technical analysis' levels:
Resistance: 119.26 (high Apr 17), 119.48 (high Apr 16), 119.62 (21-dma)
Support: 118.53 (session low Apr 20), 118.33 (low Mar 26), 118.30 (low Feb 20)
NZD/USD: Limited Reaction After Lower-Than-Expected CPI Data
(buy at 0.7630)
- New Zealand’s CPI amounted to -0.3% qoq and 0.1% yoy vs. median forecast of 0.2% yoy and 0.8% yoy in the previous quarter.
- The Reserve Bank of New Zealand's March monetary policy statement forecast a quarterly fall of 0.4% and an annual rate of 0.0%. The RBNZ is required to keep inflation within a 1-3% target band on average over the medium term, but has indicated it wants it around 2%.
- A decline in first-quarter inflation was driven by 11% fall in petrol prices. Falls were offset by higher food prices, rise in tobacco and alcohol taxes, cost of new houses and rents. Non-tradables inflation, barometer of domestic prices, amounted to 1.1% qoq and 2.3% yoy. Tradables inflation amounted to -2.2% qoq and -2.8% yoy.
- Inflation data came in slightly below the median forecast. However, the details suggest that the number was not as week as the heading figure suggests, because domestic inflation is probably slightly higher than the RBNZ was expecting. Inflation is likely to rise in the coming quarters.
- The RBNZ has held its official cash rate steady at 3.5% since last September and has signalled it expects to stay on hold into next year. We do not expect a rate cut this year. However, some market participants see a cut as soon as in June. In our opinion these expectations will diminish soon that should support the NZD.
- Separated data showed that seasonally adjusted performance of services index (PSI) rose to 57.6 last month due to strong new orders and inventories from an upwardly revised 56.0 in February. A reading above 50 indicates expansion in activity.
- The People's Bank of China lowered the reserve requirement ratio for all banks by 100 basis points to 18.5%, effective from April 20, to help spur bank lending and combat slowing growth. China is the biggest export market for New Zealand.
- The NZD/USD hit 0.7720 after the Chinese central bank decision. The 0.7722 level is the 76.4% fibo of 2015 fall, so a strong resistance level. In our opinion a corrective move is possible before breaking above this level. We are looking to get long at 0.7630. A key support is at 0.7581, daily low on April 16.
Significant technical analysis' levels:
Resistance: 0.7722 (76.4% of 2015 fall), 0.7740 (high Apr 17), 0.7782 (high Jan 20)
Support: 0.7646 (low Apr 17), 0.7581 (low Apr 16), 0.7576 (10-dma)