GROWTHACES.COM Forex Trading Strategies
Trading Postions
GBP/USD trading strategy: long at 1.5330, target 1.5480, stop-loss 1.5260
AUD/USD trading strategy: long at 0.7680, target 0.7900, stop-loss 0.7730
NZD/USD trading strategy: long at 0.7340, target 0.7660 stop-loss 0.7450
Pending Orders
EUR/USD trading strategy: buy at 1.1370, if filled - target 1.1550, stop-loss 1.1290, risk factor *
EUR/CHF trading strategy: buy at 1.0580, if filled - target 1.0800, stop-loss 1.0505, risk factor *
EUR/JPY trading strategy: buy at 134.50, if filled - target 137.00, stop-loss 133.60, risk factor ***
GBP/JPY trading strategy: buy at 182.40, if filled - target 185.00, stop-loss 181.40, risk factor ***
AUD/JPY trading strategy: buy at 91.90, if filled - target 94.30, stop-loss 91.05, risk factor ***
EUR/USD: Eyes On Greece And FOMC Minutes
(buy at 1.1370)
[ul]
[li]Greece will present its creditors with an official proposal today, aimed to save bailout talks from collapse, as time is running out for a deal that would keep the country solvent. Greek government spokesman Gavriil Sakellaridis said the Greek plan would involve extending the EUR 240 billion international loan agreement but without the austerity strings attached. The current program expires on February 28. No deal by then could radically increase the cost of financing for Greek banks.
[/li][li]Greece will ask for an extension for up to six months of the loan agreement on conditions to be negotiated. German Finance Minister Wolfgang Schaeuble said yesterday: “It’s not about extending a credit programme but about whether this bailout programme will be fulfilled, yes or no.”
[/li][li]European Central Bank governing council member Christian Noyer said that a solution to Greece’s debt problems probably lies in a rescheduling of repayments or lower interest rates.
[/li][li]Philadelphia Fed President Charles Plosser, who steps down from the central bank on March 1, said the Fed should be really close to raising rates and 1.0-1.5% rate at the end of 2015 would be reasonable. In his opinion the Federal Reserve must “look through” the temporary drop in oil prices and anticipate that the current pressure on U.S. inflation will pass.
[/li][li]Investors will be looking at the minutes of the January 27-28 FOMC meeting today. At its latest policy meeting in January, Federal Reserve officials told investors they would be “patient” about hiking short-term interest rates. Let us remind that January policy statement was interpreted as “hawkish”. Investors will be looking for some insight today whether the FOMC is ready to strip “patient” from the statement at the next meeting in March.
[/li][li]The EUR/USD was rising yesterday as the market continued to price in the likelihood there will be a deal agreed between Greece and the European Union.
[/li][li]We are still looking to get long again on the EUR/USD and raised our buy order to 1.1370.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.1450 (high Feb 17), 1.1486 (high Feb 6), 1.1499 (high Feb 5)
Support: 1.1320 (low Feb 16), 1.1303 (low Feb 12), 1.1270 (low Feb 9)
GBP/USD: Strong UK Jobs Report Supportive For Our Long Position
(long for 1.5480)
[ul]
[li]The Bank of England released minutes from the Monetary Policy Committee’s February 4-5 meeting.
[/li][li]Inflation was judged likely to remain close to zero for most of 2015, reflecting past falls in energy, food and other import prices and some continued drag from domestic slack. The near-term projection was considerably lower than it was three months ago and it was more likely than not that CPI inflation would dip briefly below zero at some point in the first half of 2015. Moreover, the MPC judged that the period of low inflation expected over 2015 posed a downside risk to inflation over the first half of the projection: the factors pulling down inflation could prove more persistent than expected or a period of low inflation could be reflected in weaker wage pressures. In the central projection, the gradual pickup in productivity growth and declines in slack were associated with a rise in four-quarter wage and unit labor cost growth, to rates consistent with the MPC’s 2% target. CPI inflation was therefore judged likely to return to the 2% target by the two-year point, before rising a little further. Although there was considerable uncertainty around the medium-term outlook, the risks around the central projection were judged to be balanced from the two-year point.
[/li][li]For two members, the February MPC’s decision remained finely balanced: given the outlook for inflation beyond the short term, there could well be a case for an increase in interest rate later in the year. All members viewed it as more likely than not that interest rate would increase over the next three years. For one member the next change in the stance of monetary policy was roughly as likely to be a loosening as a tightening.
[/li][li]Although the minutes did not name the two members who thought the decision to hold rates was finely balanced, Martin Weale and Ian McCafferty voted to increase rates from August through to December. The most prominent advocate of looser monetary policy in the past has been David Miles, who steps down later this year.
[/li][li]The Bank of England has focused more on wage growth as it considers when to start raising rates. The minutes said that wages over the past three months had increased faster than the MPC had expected.
[/li][li]Labor market data were released at the same time of the minutes on Wednesday. Average weekly earnings, including bonuses rose 2.4% yoy in the month of December. That compared with growth of 1.9% in the 12 months to November and was the fourth month in a row that earnings by that measure rose faster than inflation after lagging for the previous five years. The Office for National Statistics said pay, excluding bonuses, rose 1.6% in December, slower than growth of 1.7% in November.
[/li][li]Britain’s unemployment rate fell to 5.7%, its lowest level in more than six years. The reading was below the market consensus of 5.8%. The number of people in employment rose by 103k in the three months through December. The number of unemployed people fell by 97k. The number of people claiming unemployment benefit in the month of January fell by a larger than expected 38.6k vs. the median forecast for a fall of 25k.
[/li][/ul]
[ul]
[li]Strong UK jobs numbers gave a boost to the GBP and was supportive for our GBP/USD long position. The GBP bulls focused mainly on the widening spread of UK earnings growth over CPI. We stay long with the target of 1.5480, just below strong technical resistance level of 1.5481 (23.6% of 1.7192-1.4952)
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.5441 (high Feb 16), 1.5481 (23.6% of 1.7192-1.4952), 1.5584 (high Jan 2)
Support: 1.5317 (low Feb 17), 1.5312 (10-dma), 1.5212 (low Feb 12)
USD/JPY: No Surprise From The BOJ
(we stay sideways)
[ul]
[li]As widely expected, the Bank of Japan decided to maintain its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of JPY 80 trillion through purchases of government bonds and risky assets.
[/li][li]The Bank of Japan revised up its assessment of output, signaling its confidence that the economy is set to recover without additional monetary stimulus. But the BOJ cautioned against some weakness in private consumption, saying that recovery in some areas has been sluggish.
[/li][li]Bank of Japan Governor Haruhiko Kuroda said he saw no immediate need to expand monetary stimulus again, stressing that temporary pressure from the oil price slump will not derail steady progress towards reaching his 2% inflation target. He added the BOJ would determinedly ease policy further if his inflation plan was disrupted by risks such as a weakening economy or a continuing decline in oil prices.
[/li][li]Some investors expect the BOJ to ease again this year with some forecasting the next move to come as early as in April, when the bank issues fresh quarterly inflation forecasts. In our opinion such expectations are risky. However, there are still big challenges ahead of Japan’s economy and even existing measures provide reason enough to further weakening of the JPY in the medium term.
[/li][li]We stay sideways on the USD/JPY as we still see possibility of short-term fall in the USD/JPY rate. We are looking to get long on the EUR/JPY and GBP/JPY crosses.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 119.41 (high Feb 17), 120.46 (high Feb 12), 120.48 (high Feb 11)
Support: 118.25 (low Feb 17), 118.20 (low Feb 16), 117.19 (low Feb 6)
Source: Forex Trading Strategies