GROWTHACES.COM Forex Trading Strategies
Taken Positions
EUR/USD: long at 1.1245, target 1.1495, stop-loss 1.1145, risk factor **
GBP/USD: long at 1.5500, target 1.5750, stop-loss 1.5380, risk factor **
USD/JPY: short at 123.50, target 120.65, stop-loss 124.75, risk factor *
USD/CHF: short at 0.9360, target 0.9210, stop-loss moved to 0.9360, risk factor **
USD/CAD: short at 1.2300, target 1.2100, stop-loss 1.2400, risk factor **
AUD/USD: long at 0.7740, target 0.7990, stop-loss 0.7660, risk factor **
NZD/USD: long at 0.7000, target 0.7250, stop-loss 0.6910, risk factor ***
EUR/CHF: long at 1.0440, target 1.0680, stop-loss 1.0380, risk factor *
AUD/JPY: long at 95.00, target 97.50, stop-loss 94.00, risk factor ***
EUR/USD: Greece Decision Must Be Made On Thursday
(long for 1.1495)
- The University of Michigan's preliminary June reading on the overall index on consumer sentiment came in at 94.6, up from the final reading of 90.7 the month before. That wiped out much of May's 5.2-point drop, but it is still well off from the January peak of 98.1. The lower-weighted current conditions index did most of the heavy lifting in June, rising 6.0 to 106.8. The expectations index rose only 2.6, to 86.8. Despite the uptick in fuel costs, inflation expectations declined slightly. One year ahead expectations and annual average five year ahead average expectations both ticked down to 2.7% from 2.8%.
- Talks on ending a deadlock between Greece and its international creditors broke up in failure on Sunday. European Union officials blamed the collapse on Athens, saying it had failed to offer anything new to secure the funding it needs to repay EUR 1.6 billion to the International Monetary Fund by the end of this month. Greece retorted it was still ready to talk, but that EU and IMF officials had said they were not authorized to negotiate further. Athens insists it will never give in to demands for more pension and wage cuts. EU officials said Athens had moved closer to the lenders on the size of Greece's primary surplus - the budget balance before its debt repayments - but had not said how it intended to achieve this. EU finance ministers must make a political decision on Thursday.
- The EUR/USD fell only for a while after better-than-expected reading on U.S. University of Michigan’s consumer sentiment on Friday. This short-lived reaction was similar to the reaction after strong US retail sales data on Thursday last week, suggesting that the market is reluctant to get long on the USD. The negotiations between Greece and creditors are a key driver for the EUR, but we do not expect agreement sooner than on Thursday. That is why investors should focus now on Wednesday’s Fed statement.
- We do not change our long EUR/USD position. As we wrote in yesterday’s Week Ahead the FOMC statement, especially expected lower Fed interest rate projection, should support our long EUR/USD position. However, the volatility may be high as Greek developments continue to hit the headlines.
Significant technical analysis' levels:
Resistance: 1.1296 high Jun 12), 1.1335 (high Jun 11), 1.1387 (high Jun 10)
Support: 1.1151 (low Jun 12), 1.1083 (low Jun 8), 1.1050 (low Jun 5)
AUD/USD: RBA: Drop In AUD Likely And Necessary
(long for 0.7990)
- Reserve Bank of Australia Assistant Governor Christopher Kent said low interest rates are working to support economic activity in Australia and there is little concrete evidence that policy is less effective than in the past. Kent said low rates were driving strong growth in home building, which was supporting consumption and employment. He said it did appear that rate cuts had boosted household consumption a little less than in the past. That was partly due to indebted households taking advantage of the low interest rates to pay down mortgages faster. He also reiterated that a further drop in the AUD was both likely and necessary to support demand and help offset lower commodity prices.
- The AUD/USD opened Monday at 0.7740, which is the entry level of our long position, and reached today’s high at 0.7755. The AUD/USD is capped now by falling 21-dma that is now at 0.7758. However, we expect this resistance will be broken after Wednesday’s FOMC statement.
Significant technical analysis' levels:
Resistance: 0.7758 (high Jun 12), 0.7793 (high Jun 11), 0.7818 (high Jun 3)
Support: 0.7678 (low Jun 12), 0.7636 (low Jun 10), 0.7598 (low Jun 5)