GROWTHACES.COM Forex Trading Strategies:
Taken Positions
EUR/USD: long at 1.0860, target 1.1180, stop-loss 1.0780, risk factor **
GBP/USD: long at 1.4820, target 1.5000, stop-loss 1.4740, risk factor ***
USD/JPY: short at 119.40, target 117.50, stop-loss 120.40, risk factor ***
USD/CAD: short at 1.2520, target 1.2310, stop-loss 1.2620, risk factor **
AUD/USD: long at 0.7860, target 0.8020, stop-loss 0.7760, risk factor **
NZD/USD: long at 0.7615, target 0.7890, stop-loss 0.7465, risk factor **
EUR/JPY: long at 130.00, target 132. 00, stop-loss 129.00, risk factor ***
EUR/CHF: long at 1.0570, target 1.0990, stop-loss 1.0400, risk factor **
EUR/CAD: long at 1.3560, target 1.3900, stop-loss 1.3440, risk factor **
AUD/JPY: long at 93.40, target 95.40, stop-loss 92.40, risk factor ***
Pending Orders
EUR/GBP: buy at 0.7250, if filled – target 0.7450, stop-loss 0.7135, risk factor *
Source: Growth Aces Forex Trading Strategies
EUR/USD: Bear Attack Near Post-Fed Statement High, Eyes On Yellen
(long for 1.1180)
[ul]
[li] The ECB President Mario Draghi said that there was already evidence that the QE was taking effect. Draghi repeated that Eurozone governments had to do their part to boost productivity and growth by passing structural reforms to their economies and said that weakness in any one country hampered the entire bloc. Draghi reiterated the bank cannot buy Greek sovereign bonds as part of its quantitative easing as the ECB does not buy bonds of countries that are in a programme with the IMF and the European Commission when the review of this programme has not been completed. He added that credit rating of Greek bonds was too low and the ECB could not buy bonds from a country above a certain percentage to avoid becoming a country’s biggest creditor.
[/li][li] The USD strengthened significantly against the EUR yesterday. The USD rally began its yesterday’s rally after the EUR/USD had broken the high on March 18 when Fed statement was released. It was clearly psychological reaction of investors that still believe in a continuation of the long-term bearish trend on the EUR/USD. The March 18 high was a good opportunity to buy USD on dips for those who expect further strengthening of the USD and a parity soon. US CFTC information revealed that non-commercial EUR net short positioning widened further ahead of the March FOMC meeting to levels last seen in the middle of 2012. Such extreme bearish bets on the EUR have the potential to generate a sustainable pullback in a period when the Fed is communicating a less aggressive policy tightening and when Eurozone macroeconomic data have started surprising on the upside.
[/li][li] Despite yesterday’s USD rally we are still the opinion that EUR/USD have bottomed out. Further strengthening of the USD will be harmful to U.S. economy and will result in further delay of Fed rates hikes.
[/li][li] Traders will be listening closely to a speech by Fed Chair Janet Yellen scheduled for 19:45 GMT. Is she likely to sound hawkish enough to restore expectations for early Fed hikes? We think it is doubtful. That is why we decided to use lower EUR/USD levels to get long again at 1.0860 yesterday and keep our target at 1.1180. The strong resistance area 1.1030/50 may be broken as soon as today in case of clearly dovish Yellen’s speech.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.0896 (hourly high Mar 27), 1.1052 (high Mar 26), 1.1113 (high Mar 5)
Support: 1.0800 (psychological level), 1.0768 (low Mar 23), 1.065 (low Mar 20)
GBP/USD: Higher Oil Prices Support Slightly Bullish Outlook
(long for 1.5000)
[ul]
[li] Bank of England Deputy Governor Ben Broadbent said Britain is unlikely to suffer from protracted deflation. He expected inflation to bounce back in around a year’s time, saying that inflation was already running at more than 1%, once the effect of lower oil prices and some other factors were stripped out. He said falling oil prices increased Britons’ disposable income, making them more likely to spend on non-essential goods, and came as wages were already starting to pick up and retail sales were rising. He added the Bank of England was committed to its inflation target, and needed to be watchful about economic risks and not pre-commit to a specific monetary policy path.
[/li][li] The GBP/USD fell yesterday despite good Britain’s retail sales data and higher oil prices.
[/li][li] In our opinion the outlook on the GBP/USD is slightly bullish now. We used yesterday’s fall of the GBP/USD to get long at 1.4820. However, due to uncertainty ahead of UK elections the risk of our GBP/USD long position is elevated. The most important event for the GBP/USD traders is today’s speech of Fed Chair Janet Yellen. Any dovish hints from the Fef may push the rate near 1.5000.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.4995 (high Mar 26), 1.5008 (high Mar 19), 1.5155 (high Mar 18)
Support: 1.4799 (hourly low Mar 27), 1.4723 (low Mar 20), 1.4689 (low Mar 19)
USD/CAD Went Up Despite Quite Hawkish Poloz And Oil Prices Jump
(short again at 1.2520)
[ul]
[li] Bank of Canada Governor Stephen Poloz said that the Bank of Canada’s January rate cut has bought the central bank some time to examine the effects of cheaper oil. He repeated the bank’s view that the negative effects of lower oil prices are beginning to appear and the positive effects will take longer to emerge. He said, however, the bank would need to see more evidence of cheap oil’s destructive effects before considering another rate cut - what he calls “insurance”.
[/li][li] Poloz said that economic growth could miss the central bank’s own 1.5% forecast for the first three months of the year due to frigid weather and oil price collapse. He added that aweaker-than-expected first quarter wouldn’t “necessarily change thinking about that insurance question”.
[/li][li] Poloz argued that core inflation is lower than February’s 2.1% because it’s being propped up by “transitory” factors, including the cheaper Canadian dollar. In his opinion the real rate is like closer to 1.6 to 1.7%, after stripping out temporary factors.
[/li][li] After BoC governor’s comments we maintain our forecast that the bank will not change interest rates at its next meeting on April 15. Despite weaker forecasts for the first quarter, Poloz was optimistic about the rest of the year, particularly in manufacturing and other non-energy exports. In our opinion the main rate will be still at the level of 0.75% at the end of this year.
[/li][li] The CAD weakened against the USD yesterday despite jump in oil prices and the speech of BoC governor that was less dovish than expected. The USD/CAD rose above 1.2520, the entry level and lowered stop-loss of our short position. Our outlook on the USD/CAD is still bearish. We got short again at 1.2520.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.2531 (high Mar 26), 1.2539 (high Mar 25), 1.2546 (high Mar 24)
Support: 1.2410 (low Mar 26), 1.2407 (low Mar 5), 1.2388 (low Feb 26), 1.2360 (low Feb 17)