GROWTHACES.COM Forex Trading Strategies:
Trading Positions:
EUR/USD trading strategy: long at 1.1300, target 1.1550, stop-loss 1.1240
GBP/USD trading strategy: long at 1.5040, target 1.5250, stop-loss 1.4950
USD/CHF trading strategy: long at 0.9160, target 0.9400, stop-loss 0.9110
EUR/GBP trading strategy: long at 0.7470, target 0.7650, stop-loss 0.7490
EUR/CHF trading strategy: long at 1.0160, target 1.0650, stop-loss 1.0300
Pending Orders:
USD/JPY trading strategy: sell at 118.60, if filled target 116.60, stop-loss 119.10
USD/CAD trading strategy: buy at 1.2480, if filled target 1.2980, stop-loss 1.2380
EUR/USD: Long For 1.1550, Eyes On US GDP Data
(stay long)
[ul]
[li]Flash estimate of CPI amounted in January to -0.6% yoy vs. -0.2% yoy in December. The figure was below expectations for a decline to minus 0.5% yoy, but in line with our forecast.
[/li][li]Energy prices plunged 8.9% yoy. Unprocessed food was 0.9% cheaper, outweighing a 1.0% rise in the cost of services. Core inflation, which excludes volatile energy and unprocessed food prices, dipped to 0.6% yoy in January from 0.7% yoy in December.
[/li][/ul]
[ul]
[li]The seasonally adjusted unemployment rate in Euro zone fell to 11.4% in December from 11.5% in November.
[/li][li]U.S. Labor Department announced yesterday that initial claims for state unemployment benefits dropped 43k to a seasonally adjusted 265k for the week ended January 24, the lowest since April 2000. The decline exceeded expectations for a drop to only 300k.
[/li][li]Despite very good U.S. labor market data yesterday and lower-than-expected Euro zone CPI reading, the EUR/USD is gradually getting higher. In our opinion this is a strong evidence of profit taking on EUR-selling positions taken ahead of the ECB’s QE decision last week.
[/li][li]The main event today is the release of U.S. GDP growth for the fourth quarter. Our forecast (3.0%) is slightly below the market consensus (3.1%).
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.1368 (high Jan 29), 1.1384 (high Jan 28), 1.1389 (10-dma)
Support: 1.1263 (low Jan 29), 1.1224 (low Jan 27), 1.1098 (low Jan 26)
USD/JPY: Good Labor Market Data Strengthened JPY
(we’ve lowered our sell order to 118.60)
[ul]
[li]Japan’s core consumer prices rose 2.5% yoy in December. The reading was below the median estimate for a 2.6% . The so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the United States, rose 2.1% yoy.
[/li][li]Excluding the effect of a sales tax hike in April last year, core CPI stood at 0.5% yoy in December, far away from the Bank of Japan’s 2% target.
[/li][li]The Bank of Japan will be encouraged by data showing a rise in factory output thanks to a much-awaited rebound in exports, while household spending showed signs of bottoming out.
[/li][li]Japan’s industrial output rose 1.0% mom in December compared with a median market forecast for a 1.3% mom increase. Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 6.3% in January and decline 1.8% in February.
[/li][li]Japanese household spending fell 3.4% yoy in December vs. median estimate of a 2.5% decline.
[/li][li]The seasonally adjusted unemployment rate fell to 3.4% in December from 3.5% in November. The jobs-to-applicants ratio rose to 1.15 from 1.12 in November, reaching the highest since March 1992. That compared with the median forecast that the ratio would remain unchanged. The number of new job offers rose 4.7% mom and 5.6% yoy in December.
[/li][li]Good labor market data are good news for the central bank. BOJ Governor Haruhiko Kuroda said yesterday that while consumer inflation may slow in the short-term due to slumping oil prices, it will accelerate in the latter half of the next fiscal year beginning in April as companies raise wages and an economic recovery pushes up prices.
[/li][li]The USD/JPY opened the Asian session above 118.00, but in reaction to good labor market data the rate is falling. The USD/JPY has been fluctuating in the narrowing channel since January 20. In our opinion the more probably scenario is that the USD/JPY will break below strong support area 117.20/30 and we are looking to get short. We have lowered our sell order to 118.60. If filled the target will be 116.60.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 118.50 (high Jan 29), 118.66 (high Jan 27), 118.82 (high Jan 22)
Support: 117.40 (low Jan 29), 117.34 (low Jan 27), 117.26 (low Jan 26)
EUR/CHF: Stay Long, Scope Seen To 1.0650
(stay EUR/CHF and USD/CHF long)
[ul]
[li]The KOF economic barometer, which gives an indication of the likely performance of the economy in about six months’ time, fell to 97 points in January from a revised 98.8 points in December. The reading does not yet reflect fallout from a surging Swiss franc after the Swiss central bank abandoning a cap on currency, because most participants had already responded beforehand.
[/li][li]The KOF Swiss Economic Institute slashed its growth forecast for 2015 to -0.5% from the 1.9% it had predicted in December and said it expects no growth next year, having previously forecast a 2.1% expansion as the uncapped Swiss franc’s surge makes the country’s exports more expensive. The KOF expects that the unemployment rate will increase from 3.2% in 2014 to 3.4% this year and 4.1% in 2016, while consumer prices will fall by 1.5% in 2015 compared with a previous -0.1% forecast.
[/li][li]The EUR/CHF rose above 1.05 today, for the first time since the Swiss National Bank dumped its 1.20 cap. The traders expect the SNB would act strongly to try to protect Swiss exporters from a weak euro.
[/li][li]We took profit on our USD/CHF long position yesterday and got long again at 0.9160. We keep our EUR/CHF long position taken at 1.0160. The target for our EUR/CHF long is 1.0650 (recovery high on January 15).
[/li][/ul]
Source: Forex Trading Strategies