GROWTHACES.COM Forex Trading Strategies
Taken Positions
EUR/USD: long at 1.0740, target 1.1000, stop-loss 1.0615, risk factor *
GBP/USD:long at 1.4900, target 1.5270, stop-loss moved to 1.4900, risk factor *
USD/JPY: short at 119.35, target 117.20, stop-loss 120.20, risk factor **
USD/CHF: short at 0.9590, target 0.9360, stop-loss moved to 0.9590, risk factor *
USD/CAD: short at 1.2280, target 1.2000, stop-loss 1.2380, risk factor **
AUD/USD: long at 0.7730, target 0.7950, stop-loss 0.7620, risk factor **
EUR/GBP: long at 0.7170, target 0.7350, stop-loss 0.7110, risk factor ***
GBP/JPY: long at 177.20, target moved to 180.20, stop-loss moved to 178.20, risk factor **
AUD/JPY: long at 91.80, target 94.00, stop-loss moved to 91.80, risk factor ***
Pending Orders
NZD/USD: buy at 0.7650, if filled - target 0.7850, stop-loss 0.7550, risk factor **
EUR/JPY: buy at 128.00, if filled - target 130.00, stop-loss 127.00, risk factor *
CHF/JPY: buy at 124.50, if filled - target 126.85, stop-loss 123.50, risk factor *
Daily Forex Analyses And Trading Strategies
EUR/USD Bulls Are Putting Up A Fight
(long at 1.0740)
[ul]
[li]Executive Board Member Benoit Coeure said that the European Central Bank will continue to fund Greek banks as long as they stay solvent and have enough collateral. Greek banks have been relying on emergency liquidity assistance (ELA) from the domestic central bank, drawn against collateral. ELA funding drawn from the Bank of Greece hit EUR 68.5 billion in March as Greek banks suffered deposit outflows of EUR 24 billion from December through February.
[/li][li]Bloomberg reported yesterday that the European Central Bank staff had prepared a proposal to increase the haircut on the security that Greek banks offer in return for emergency liquidity. By increasing this haircut, it would effectively reduce the value of security that Greek banks can offer and consequently the amount of Emergency Liquidity Assistance they can draw down.
[/li][li]Benoit Coeure said: “In recent days, there has been tangible progress in the quality of the discussions with the three institutions – the ECB, the European Commission and the IMF – which can be built upon.”
[/li][li]Greek Deputy Finance Minister Dimitris Mardas said Greece aimed to have EUR 2.5 billion buffer from the transfer of state entities’ cash reserves at the central bank in order to cover any payment needs until end of May. Greece has been tapping into the cash reserves of such entities through repo transactions.
[/li][li]The EUR/USD recovered some ground today. U.S. existing home sales data are scheduled for 14:00 GMT. The market expects a reading of 5.03 million vs. 4.88 in the previous month. The USD is likely to depreciate somewhat in case of weaker-than-expected data as USD bulls are becoming frustrated with the recent string of poor U.S. economic data and trimming their long-USD bets.
[/li][li]Our EUR/USD long was under threat yesterday. However, the rate did not spend long under 10-dma (currently at 1.0695) and closed back above this level, which suggests that the EUR/USD bulls are putting up a fight. That is why our long taken at 1.0740 remains in play.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.0824 (high Apr 20), 1.0848 (high Apr 17), 1.0887 (high Apr 8)
Support: 1.0695 (10-dma), 1.0660 (low Apr 21), 1.0624 (low Apr 16)
GBP/USD Ascends After Upbeat MPC Minutes
(long at 1.4900)
[ul]
[li]The minutes of the April 8-9 meeting of the Monetary Policy Committee showed that the officials voted unanimously to keep rates steady at a record-low 0.5%.
[/li][li]The central bank said that British domestic data had been broadly in line with what they expected when the central bank made its last set of forecasts in February, but that the Eurozone appeared to be recovering more strongly than thought. For some policymakers, weakness in the United States and China counterbalanced the stronger news from the Eurozone.
[/li][li]The central bank said it still expected this rate to briefly fall into negative territory in the coming months. However, policymakers appeared slightly more focused on upside risks to British inflation than in previous months. The central bank also noted the possibility that GBP strength had been having a more rapid than expected effect on inflation, implying that inflation could then bounce back more strongly when temporary downward pressures on prices faded.
[/li][li]In the opinion of the Bank of England stronger economic growth will push up prices and wages. That is why the most important data for the central bank, apart from inflation, will be wages growth.
[/li][li]The GBP/USD rose above 1.5000 after minutes from the latest Bank of England policy meeting showed policymakers slightly more focused on the risks inflation could accelerate. The minutes supported our GBP/USD long position. We keep our target on the GBP/USD at 1.5270 and have raised the target on the GBP/JPY long to 180.20.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.5053 (high Apr 17), 1.5147 (high Mar 18), 1.5255 (high Mar 6)
Support: 1.4857 (low Apr 21), 1.4813 (low Apr 16), 1.4703 (low Apr 15)
AUD/USD: Australian Inflation Data Cools Rate Cut Expectations
(long for 0.7950)
[ul]
[li]Australian inched up 0.2% in the first quarter, while the annual pace of inflation slowed to 1.3% from 1.7%, matching expectations. Key measures of underlying inflation favoured by the Reserve Bank of Australia rose 0.6% for the quarter. The annual pace of core inflation at 2.3% remained in the lower half of the RBA’s long-term target band of 2 to 3%.
[/li][/ul]
[ul]
[li]For the first quarter alone, a 12% drop in petrol prices combined with falling prices for clothing, fruit and telecoms to hold the CPI down. That helped offset a sharp jump in education and health care bills, which typically feature fee increases at the start of a year, while domestic holidays and houses also rose.
[/li][li]The divergence was apparent in tradable prices, those for goods and services subject to international competition, which fell 1.2% in the quarter. In contrast, non-tradable prices climbed 1.0% in the quarter.
[/li][li]Minutes of the April policy meeting released this week showed the Board was open to another easing but had wanted to see more data, including the inflation report, before deciding. Interbank futures currently imply around a 45% chance of a move at the next policy meeting on May 5, rising to almost 80% by June. We are still the opinion that the RBA will not change interest rates. Today’s CPI reading reduced the risk of a cut in May.
[/li][li]The AUD/USD opened slightly above 0.7700 on Wednesday and rose strongly after Australian CPI reading. In our opinion there is still potential for further rise in the AUD/USD as we do not expect a rate cut in May, against the market consensus. Moreover, demand for the USD has lowered recently, after a series of weaker-than-expected data from the US economy.
[/li][li]We maintain our long position taken at 0.7730. The target of our position is 0.7950.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 0.7844 (high Apr 20), 0.7884 (high Mar 26), 0.7904 (high Mar 25)
Support: 0.7699 (10-dma), 0.7683 (low Apr 21), 0.7673 (low Apr 16)