GROWTHACES.COM Forex Trading Strategies:
Taken Positions
EUR/USD: long at 1.0920, target 1.1180, stop-loss 1.0920, risk factor **
USD/CAD: short at 1.2520, target 1.2310, stop-loss 1.2520, 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/GBP: long at 0.7175, target 0.7450, stop-loss 0.7290, risk factor *
EUR/CHF: long at 1.0570, target 1.0990, stop-loss 1.0400, risk factor **
EUR/CAD: long at 1.3650, target 1.3900, stop-loss 1.3650, risk factor **
AUD/JPY: long at 93.40, target 95.40, stop-loss 92.40, risk factor ***
Pending Orders
USD/JPY: sell at 119.40, if filled - target 117.50, stop-loss 120.40, risk factor ***
EUR/JPY: buy at 130.00, if filled – target 132. 00, stop-loss 129.00, risk factor ***
Source: Growth Aces Forex Trading Strategies
EUR/USD: U.S. Economy Hurt By Strong USD
(stay long for 1.1180)
[ul]
[li]European Central Bank Governing Council Member Jens Weidmann said on Wednesday he saw no sign of a deflationary spiral in the Eurozone and that the chances of such a thing taking hold remained very low. He said there was a risk that favourable financing conditions for governments resulting from the ECB’s sovereign bond-buying plan would lead them to lose motivation to pursue further budget consolidation and reform measures.
[/li][li]The European Central Bank raised the cap on emergency liquidity assistance that Greek banks can draw from the country’s central bank to above EUR 71 billion from EUR 69.8 billion. ECB policymaker Jens Weidmann urged Greek banks receiving emergency liquidity assistance from their national central bank to improve their liquidity position.
[/li][li]Greek central bank chief Yannis Stournaras said the chances of Greece doing a deal with its European creditors had grown since a meeting in Berlin this week.
[/li][li]U.S. orders for durable goods dropped 1.4% mom in February following a 2% increase in January and declines of 3.7% in December and 2.2% in November. The weakness in February data was widespread, with weaker demand for commercial aircraft, autos and machinery. Transportation orders were down 3.5%. Excluding transportation, durable goods orders dropped 0.4%.
[/li][li]Business spending on capital goods has been hurt by a strong USD. Lower crude prices forced oil firms to either delay or cut back on investment projects. Shipments of core capital goods, which are used to calculate equipment spending in the government’s GDP measurement, rose 0.2% last month after slipping by a revised 0.4% in January. They were previously reported to have gained 0.1% in January. This suggests weaker U.S. GDP growth in the first quarter 2015. The Atlanta Federal Reserve Bank’s model forecasts a growth pace of only 0.3% for this quarter. The economy expanded at a 2.2% rate in the fourth quarter.
[/li][li]Atlanta Fed President Dennis Lockhart, a voting member of the Fed this year, said that while he thinks it is quite likely that rates will increase by September, even if inflation does not meet the Fed’s target of 2%. Instead, Lockhart believes that the Fed has a bias toward looking at the employment side of the mandate.
[/li][li]In the opinion of Federal Reserve policymaker James Bullard (non-voting) it is good time to start normalizing U.S. monetary policy. He added: “Even with some normalization, monetary policy will remain exceptionally accommodative.”
[/li][li]As we suggested earlier too strong USD is weighing on the U.S. economy and may delay Fed’s monetary tightening. Weaker U.S. data are in line with our scenario and make us more confident that our long EUR/USD is the right direction.
[/li][li]We stay EUR/USD long for 1.1180.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.1062 (high Mar 18), 1.1115 (high Mar 5), 1.1185 (high Mar 4)
Support: 1.0891 (low Mar 24), 1.0873 (21-dma), 1.0788 (10-dma)
GBP/USD: UK Retail Sales Strongly Up, But Deflator Does Not Herald BoE Hikes
(stay sideways, outlook slightly bullish)
[ul]
[li]British retail sales rose 0.7% mom and 5.7% yoy in February vs. expected rise of 0.4% mom. Data for January was revised to show monthly growth in sales volumes of 0.1%, compared with an original reading that showed a 0.3% fall.
[/li][li]The Office for National Statistics said a 0.9% monthly increase in February in sales in non-specialized stores reflected higher furniture purchases which often lag a recovery in home sales.
[/li][li]Prices in stores fell by 3.6% in February, the biggest yoy fall since 1997 when records began, pushed down by lower fuel and food prices. The data highlights that lower prices is helping to keep consumers spending but they will also make it difficult for the Bank of England to justify interest rates hikes. In our opinion the first rate hike will take place not sooner than in the first quarter 2016.
[/li][li]The GBP rose to a one-week peak against the USD after the release of British retail sales data. We stay sideways on the GBP/USD due to political uncertainty ahead of UK elections. However, the outlook is slightly bullish on this pair. On the other hand, we stay EUR/GBP long for 0.7450.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.4993 (session high Mar 26), 1.5008 (high Mar 19), 1.5155 (high Mar 18)
Support: 1.4866 (10-dma), 1.4831 (low Mar 25), 1.4689 (low Mar 19)
USD/JPY, USD/CAD: Oil And Safe Havens Climbed On Yemen Conflict
[ul]
[li]Saudi Arabia and Gulf region allies launched military operations including air strikes in Yemen to counter Iran-allied forces besieging the southern city of Aden where the U.S.-backed Yemeni president had taken refuge. Gulf broadcaster al-Arabiya TV reported was sending 30 warplanes to join the operation, along with 15 each from Bahrain and Kuwait, 10 from Qatar, six each from Jordan and Morocco and three from Sudan.
[/li][li]The crisis now risks spiralling into a proxy war with Iran backing the Houthis, and Saudi Arabia and the other regional Sunni Muslim monarchies supporting Yemeni President Abd-Rabbu Mansour Hadi. The White House said in a statement the United States supported the operation, led by the Arab Gulf Cooperation Council countries. U.S. forces were not involved in direct military action in Yemen, a National Security Council spokeswoman said.
[/li][/ul]
USD/JPY: Sell At 119.40
[ul]
[li]Yemen conflict could pose risks for global oil supplies and provided a tailwind for oil prices and safe-haven currencies. The USD/JPY broke below 100-dma for first time since August 8, 2014 and fell below 118.50. Our EUR/JPY long position reached the raised stop-loss at 130.20 and we took profit on this position opened at 129.00.
[/li][li]Our USD/JPY sell order was not filled yesterday, but we maintain our bearish bias on this pair. We have lowered our sell offer to 119.40. The nearest strong support level is 118.00.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 119.34 (hourly high ar 26), 119.57 (session high Mar 26), 119.83 (high Mar 25)
Support: 118.30 (low Feb 20), 118.11 (low Feb 16), 118.00 (psychological level)
USD/CAD: Stay Short For 1.2310
[ul]
[li]Bank of Canada Deputy Governor Tim Lane said that persistently low oil prices could make some Canadian production uneconomical, while the sharp drop in crude prices will weigh on the economy. He repeated that low prices will have an overall negative effect on the economy, with the timing of positive offsets uncertain. He added that the improving U.S. economy will help boost Canada’s exports. The central bank has forecast growth will average 1.5% in the first half of 2015. Lane said that the drop in energy prices could push total inflation briefly negative, though the bank would not consider that to be deflation.
[/li][li]The market is waiting for a speech by Bank of Canada Governor Stephen Poloz (13:30 GMT). His comments about the monetary policy direction and outlook on the economy are likely to move the CAD. We do not expect any dovish hints and in our opinion the CAD may strengthen after his speech.
[/li][li]We got short on the USD/CAD at 1.2520 yesterday. A surge in oil prices is a CAD positive. The USD/CAD fell below 1.2448 (hourly low on March 24). Our short-term outlook for the USD/CAD is bearish. We set the target of our short position at 1.2310.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.2539 (high Mar 25), 1.2546 (high Mar 24), 1.2600 (psychological level)
Support: 1.2407 (low Mar 5), 1.2388 (low Feb 26), 1.2360 (low Feb 17)