EUR/USD: Market in holiday mood
- The dollar lost some steam on Thursday. While trade is expected to slow down ahead of Christmas, the market's near-term focus is on U.S. economic indicators due Thursday, including revised GDP for July-Sept, durable goods orders for November, and weekly initial jobless claims.
- The market is relatively quiet on a holiday mood, but if the U.S. economic data is worse than the market expects, the dollar is likely to be sold further. On the other hand, the common currency could come under pressure as investors contemplate the future of the ailing Banca Monte dei Paschi di Siena SpA (MI:BMPS) bank, Italy's third largest lender. The bank has all but failed to pull off a last-ditch rescue plan and a state bailout for the ailing Italian bank now looks inevitable.
- We keep our EUR/USD trading strategy unchanged. Our sell offer is still at 1.0590.
NZD/USD: Kiwi turns up after better-than-expected growth data
- The New Zealand economy advanced 1.1% on quarter in the third quarter of 2016, higher than a downwardly revised 0.7% expansion in the previous period and beating market expectations of 0.9%. It is the highest growth rate in three quarters. Year-on-year, the economy expanded 3.5%, following a downwardly revised 3.4% growth in the previous period.
- Manufacturing grew 1.2% in the quarter while higher visitor numbers boosted tourism exports and retail, trade and accommodation services. Growth in the overall services sector amounted to 1.1%, while construction jumped 2.1%. A 0.7% decline in goods exports, which were hit by falling dairy and meat shipments, was practically the only soft spot. That should change this quarter with dairy prices recovering.
- The upbeat data should give the Reserve Bank of New Zealand further reason to not lower interest rates when it meets in February, even as inflation and wages growth remain subdued. The RBNZ has already slashed interest rates three times this year to a record low 1.75% to help stoke inflation, which, at just 0.2% sits well below the bank's target band of 1 to 3%.
- The NZD broke a six-session losing streak on Thursday, stepping up after data showed the economy grew at a rapid pace in the third quarter, bolstering views the central bank was done cutting interest rates. We think that strong economic growth and steady monetary policy should help temper some expectations that the NZD is headed lower. We think the NZD has a potential to appreciate, especially against low-yielding currencies, such as EUR or JPY. The outlook against the USD is uncertain, especially that monthly charts maintain their bear bias.
TRADING STRATEGIES:
FOREX - MAJOR PAIRS: 
FOREX - MAJOR CROSSES: 
PRECIOUS METALS: 
It is usually reasonable to divide your portfolio into two parts: the core investment part and the satellite speculative part. The core part is the one you would want to make profit with in the long term thanks to the long-term trend in price changes. Such an approach is a clear investment as you are bound to keep your position opened for a considerable amount of time in order to realize the profit. The speculative part is quite the contrary. You would open a speculative position with short-term gains in your mind and with the awareness that even though potentially more profitable than investments, speculation is also way more risky. In typical circumstances investments should account for 60-90% of your portfolio, the rest being speculative positions. This way, you may enjoy a possibly higher rate of return than in the case of putting all of your money into investment positions and at the same time you may not have to be afraid of severe losses in the short-term.
How to read these tables?
1. Support/Resistance - three closest important support/resistance levels
2. Position/Trading Idea:
BUY/SELL - It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.
LONG/SHORT - It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.
3. Stop-Loss/Profit Locked In - Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.
4. Risk Factor - green "*" means high level of confidence (low level of uncertainty), grey "**" means medium level of confidence, red "***" means low level of confidence (high level of uncertainty)
5. Position Size (forex)- position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!
Position size (precious metals) - position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).
6. Profit/Loss on recently closed position (forex) - is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
Profit/Loss on recently closed position (precious metals) - is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.