GROWTHACES.COM Trading Positions
EUR/USD: short at 1.2410, target 1.2180, stop-loss 1.2450
GBP/USD: short at 1.5670, target 1.5520, stop-loss 1.5720
USD/CHF: long at 0.9680, target 0.9870, stop-loss 0.9655
USD/CAD: long at 1.1420, target 1.1600, stop-loss 1.1380
EUR/GBP: short at 0.7930, target 0.7780, stop-loss 0.7990
EUR/CHF: long at 1.2025, target 1.2095, stop-loss 1.1995
USD/JPY: Ice Bucket Challenge For The USD Bulls
(our long positions reached stop-loss level, we stay flat)
[ol]
[li]Bank of Japan showed that the corporate goods price index which measures the price companies charge each other for goods and services, rose 2.7% yoy in November. When excluding the effect of a sales tax hike to 8% from 5% in April, the index fell 0.2% yoy, turning negative for the first time since March 2013. The BOJ looks increasingly likely to cut its inflation forecasts next month.
[/li][li]The consumer confidence index, which includes views on incomes and jobs, amounted to 37.7 in November, the lowest since April.
[/li][li]Fitch Ratings has placed Japan’s A+ Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) on Rating Watch Negative (RWN). Fitch will look to resolve the RWN during the first half of 2015 in light of the next government’s fiscal plans and updated fiscal and economic projections.
[/li][li]The USD bulls were shaken out of their positions as investors were taking profits from JPY-selling positions at the end of the year. The USD/JPY dropped more than 2% at one stage to 117.90 yesterday in a turnaround from a 7-year peak of 121.86 on Monday.
[/li][li]The source of profit taking was a rise in risk aversion after Greece’s government brought forward a crucial presidential vote by two months to next week. Parliament’s vote to select a new president, the first round of which will be held on December 17 instead of February 15 as previously scheduled, could trigger early elections if Prime Minister Antonis Samaras fails to get his candidate for president elected. The decision prompted the steepest daily fall in Greek stocks on Tuesday in more than a quarter century and a jump in bond yields.
[/li][li]Our long position at 120.40 reached the stop-loss level at 119.60. We got long again at lower level, but the position also reached the stop-loss at 118.80. In our opinion the short-term outlook is mixed and no position is justified from the risk/reward perspective. The medium-term outlook remains bullish.
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Significant technical analysis’ levels:
Resistance: 119.92 (session high Dec 10), 121.00 (high Dec 9), 121.86 (high Dec 8)
Support: 118.86 (hourly low Dec 10), 118.68 (session low Dec 10), 118.27 (21-dma)
EUR/USD: Still Bearish Outlook, But Risk Is Higher
(our short reached the stop-loss, but we got short again at 1.2410)
[ol]
[li]ECB policymaker Ardo Hansson said it is too early to say whether the European Central Bank’s January policy meeting will be too soon to decide on whether the bank should start buying sovereign bonds. He believes that the possible risks may outweigh benefits and it may not be worth taking that step, adding that quantitative easing impact may be small. It seems that if further balance sheet expansion is required, Hansson would likely favour targeting other private sector assets (corporate bonds or stocks). The ECB is due to hold its next monetary policy meeting on January 22.
[/li][li]The EUR/USD jumped to 1.2448 when the USD/JPY collapsed before falling back below 1.2380 yesterday. Our short EUR/USD position reached the stop-loss level at 1.2390, but we got short again at 1.2410 and set the target at 1.2180.
[/li][li]The EUR/USD opened today’s Asian session at 1.2375. The fundamental outlook for the EUR/USD remains bearish, but breaking above our stop-loss level of 1.2450 could open the way even to 1.2600.
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Significant technical analysis’ levels:
Resistance: 1.2435 (21-dma), 1.2451 (30-dma), 1.2467 (high Dec 4)
Support: 1.2292 (low Dec 9), 1.2247 (low Dec 8), 1.2242 (low Aug 10, 2012)
GBP/USD: Hawkish Carney Strengthened The GBP
(stay short)
[ol]
[li]Bank of England Governor Mark Carney said British interest rates will have to rise despite an expected dip in inflation but the exact timing of the hike is uncertain and any moves are likely to be gradual.
[/li][li]Ian McCafferty, one of two BoE policymakers who have voted for higher interest rates since August, said the economy was running out of slack, despite signs of a slight slowdown, and inflation could pick up more quickly than the Bank has forecast. McCafferty said recent private-sector pay data pointed to a pickup in wages.
[/li][li]Britain’s goods trade deficit narrowed in October to GBP 9.620 bn, its lowest level in seven months, from GBP 10.506 bn in Septmeber. The Office for National Statistics said a drop in oil imports was the main driver for this fall. On the other hand, exports rose helped by higher sales of silver to India.
[/li][li]We are still short on the GBP/USD (position taken at 1.5670) with the target at 1.5520. We got short on the EUR/GBP at 0.7930 and set the target at 0.7780 yesterday.
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Significant technical analysis’ levels:
Resistance: 1.5720 (high Dec 8), 1.5743 (high Dec 2), 1.5762 (high Dec 1)
Support: 1.5660 (hourly low Dec 10), 1.5626 (low Dec 9), 1.5541 (low Dec 8)
Thank you for reading
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