GROWTHACES.COM Forex Trading Strategies
Taken Positions
GBP/USD: long at 1.5270, target 1.5540, stop-loss 1.5170, risk factor **
USD/JPY: short at 119.35, target 117.20, stop-loss 120.20, risk factor ***
USD/CAD: short at 1.2110, target 1.1930, stop-loss 1.2205, risk factor ***
AUD/USD: long at 0.7870, target 0.8230, stop-loss 0.7790, risk factor ***
Pending Orders
EUR/USD: buy at 1.1150, if filled – target 1.1350, stop-loss 1.1040, risk factor **
NZD/USD: buy at 0.7560, if filled – target 0.7800, stop-loss 0.7450, risk factor ***
EUR/JPY: buy at 133.00, if filled – target 135.60, stop-loss 131.90, risk factor **
EUR/CAD: buy at 1.3460, if filled – target 1.3730, stop-loss 1.3340, risk factor **
GBP/JPY: buy at 182.50, if filled - target 184.90, stop-loss 181.50, risk factor **
AUD/NZD: buy at 1.0320, if filled – target 1.0530, stop-loss 1.0220, risk factor ***
AUD/JPY: buy at 93.80, if filled - target 97.00, stop-loss 92.80, risk factor ***
Source: Growth Aces Forex Trading Strategies
GBP/USD Slides After Weak British PMI Data
(long at 1.5270)
[ul]
[li]British PMI manufacturing dropped to a seven-month low of 51.9 in April from a downwardly revised 54.0 in March, the biggest one-month fall since February 2013. The figure is still just above the 50-mark that divides growth from contraction, but much lower than forecasts. The figures follow official figures announced earlier this week which showed that economic growth in the first quarter was its slowest since late 2012.
[/li][li]PMI shows that the investment and export pictures are subdued. A decline in capital goods new orders is a weak bellwether for business investment spending, while a slowing global economy and strong GBP against the EUR hurts the competitiveness of exporters. PMI suggests that the manufacturing sector is unlikely to provide much of a boost to broader economic growth. This keeps the emphasis for maintaining the recovery highly reliant on the service sector. PMI services index will be released on Wednesday.
[/li][li]PMI signals that price pressures remained on the downside in April, with both input costs and output charges falling during the latest survey month.
[/li][li]The Bank of England said consumer credit grew by GBP 1.24 billion in March, higher than a median forecast of GBP 800 million. That was the biggest monthly increase since February 2008 and compared with the same month last year, the increase was the biggest in nearly nine years. This suggests that consumer confidence is improving and that Britain’s economic recovery has become increasingly reliant on spending by households.
[/li][li]There was also a big jump in lending to business in March which was up by GBP 2.72 billion. Mortgage approvals for house purchases numbered 61,341 in March, down a touch from 61,523 in February.
[/li][li]The market is focused also on the parliamentary election set for May 7. With less than a week to go, polls show the ruling Conservatives and the main opposition Labour Party neck-and-neck while support for Scotland’s nationalist party has surged, making a hung parliament the most likely outcome. Labour Party has a one percentage point lead over Prime Minister David Cameron’s Conservatives, according to a YouGov opinion poll published on Thursday. Labour Party has a two point lead, according to a Panelbase poll. Ipsos-MORI poll had suggested the Conservatives had a five point lead over Labour.
[/li][li]The GBP fell to a three-week low against the EUR after weak PMI data. We have taken profit on our long EUR/GBP position opened at 0.7170 that reached its target of 0.7350 today. The GBP fell also against the USD, below 1.5300 from 1.5370 before the PMI reading. We have used today’s GBP/USD drop to get long at 1.5270, in line with our trading strategy. The target is 1.5540.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.5396 (session high May 1), 1.5492 (high Apr 30), 1.5498 (high Feb 29)
Support: 1.5254 (hourly low Apr 28), 1.5174 (low Apr 28), 1.5167 (100-dma)
USD/JPY Went Up Despite Slightly Higher Japan’s CPI Reading
(short at 119.35)
[ul]
[li]Japanese core inflation, excluding for volatile food prices, ticked up to 2.2% yoy in March from 2.0% yoy in February. CPI, excluding both food and energy prices, rose 2.1% yoy compared with 2.0% yoy in February. We should notice that the consumption tax hike in April last year has pushed the inflation rate up by about 2 percentage points.
[/li][li]The unemployment rate slipped to 3.4% in March from 3.5% the month before, matching the level last seen in December. The jobs-applicants ratio in March was unchanged on the month at 1.15, which means 115 positions were available for every 100 job seekers.
[/li][li]Japanese household spending fell 10.6% yoy in March vs. the median estimate of 12.1% yoy decline.
[/li][li]Japan’s Manufacturing PMI fell to a seasonally adjusted 49.9 in April, compared with a preliminary reading of 49.7 and final 50.3 in March. Japanese manufacturing activity contracted for the first time in almost a year as domestic orders and output fell, adding to fears that the economy struggling to gain traction.
[/li][li]The USD/JPY is rising today despite slightly higher-than-expected CPI reading. Our short position is under threat as the rate broke above resistance levels between recent highs. The next resistance levels are psychological barrier at 120.00 and 120.10 high on April 23. The USD/JPY reaction to worse-than-expected U.S. figures on Wednesday and on-hold BOJ on Thursday was short-lived which suggests weakening bearish sentiment and increases a risk of further USD/JPY rises.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 120.00 (psychological barrier), 120.10 (high Apr 23), 120.17 (high Apr 14)
Support: 118.75 (hourly low Apr 30), 118.50 (low Apr 30), 118.33 (low Mar 26)