GROWTHACES.COM Trading Positions
USD/JPY: long 113.90, target 115.20, stop-loss 113.30
EUR/GBP: short at 0.7850, target 0.7670, stop-loss 0.7920
AUD/NZD: long at 1.1220, target 1.1500, stop-loss 1.1080
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EUR/USD: Some Profit Taking Possible This Week
(profit taken, looking to get short again)
- The US Labor Department said employers added 214k new jobs to their payrolls last month. The unemployment rate fell to a fresh six-year low 5.8% from 5.9% in the previous month. The increase in employment was slightly weaker than the market consensus (231k) and our forecast (225k), but that was offset by a combined 31k upward revision to data for August and September. The employment-to-population ratio touched its highest level since July 2009, while the ranks of the long-term unemployed were the smallest in nearly six years.
- Average hourly earnings’ growth is still sluggish. It was only three cents last month. Despite no acceleration in hourly earnings take-home wages are getting higher. It is because not only is the employment rising, but people are also putting in longer hours. Last month, the average workweek hit a near six-and-a-half year high.
- The Federal Reserve last week struck a relatively upbeat tune on the jobs picture as it ended a bond-buying stimulus program. After the release of employment data, financial markets held to their view that benchmark rates would stay near zero until the second half of 2015.
- The EUR/USD fell just after the release of the non-farm payrolls and reached its daily low at 1.2358 (slightly above the target of our short position). The USD depreciated afterwards on profit taking and small disappointment after weaker-than-expected headline non-farm payrolls figure. We have taken small profit on our short position (taken at 1.2530) after the EUR/USD had reached the stop-loss level at 1.2460.
- The EUR/USD rose to 1.2489 today and in the opinion of GrowthAces.com the range of recovery is likely to be higher. An important short-term resistance is situated at 1.2533 (10-dma). We have place our sell offer slightly below that level – at 1.2530.
- The medium-term outlook remains bearish.The volatility on the FX market is likely to be lower this week and there will be also no triggers that could change the main trends. Moreover, we have Veteran’s Day on Tuesday in the USA.
Significant technical analysis' levels:
Resistance: 1.2520 (200-hma), 1.2533 (10-dma), 1.2577 (high Nov 4)
Support: 1.2358 (low Nov 7), 1.2342 (low Aug 21, 2012), 1.2295 (low Aug 20, 2012)
USD/CAD: The Loonie Came From Behind After Jobs Report
(we’ve placed our bid at 1.1270)
- Canada unexpectedly added 43.1k new jobs in October, and the unemployment rate dropped to a nearly six-year low of 6.5% from 6.8% in September. A loss of 5k was expected after September’s strong gain of 74.1k. The labor participation rate stayed at 66.0%, the lowest since November 2001.
- The 12-month gain was 181.8k, with the growth in September and October of this year accounting for two-thirds of the increase. The two-month total gain of 117.2k jobs was the greatest since the 147.5k recorded in March and April of 2012.
- After good employment report we should remind last-week speech of the Bank of Canada Governor Stephen Poloz. He said persistently sluggish job creation record and slack in the economy were among the reasons to keep interest rates low.
- The CAD rallied against the USD to 1.1312 after the release of the employment report. We expect the USD to weaken slightly on profit taking this week butthe medium-term outlook is still bullish. We are hunting for lower levels to get long on the USD/CAD. GrowthAces.com has placed its bid offer at 1.1270.
- Let’s take a look at macroeconomic calendar. Canadian housing starts data are scheduled for today. Manufacturing sales figures will be released on Friday.
Significant technical analysis' levels:
Resistance: 1.1367 (hourly high Nov 7), 1,1450 (session high Nov 7), 1.1466 (high Nov 5)
Support: 1.1264 (low Nov 3), 1.1239 (30-dma), 1.1181 (low Oct 31).