GROWTHACES.COM Forex Trading Strategies:
Taken Positions
GBP/USD: long at 1.4820, target 1.5000, stop-loss 1.4740, risk factor ***
USD/JPY: short at 119.40, target 117.50, stop-loss 120.40, risk factor ***
USD/CAD: short at 1.2650,target 1.2350, stop-loss 1.2790, risk factor ***
AUD/USD: long at 0.7660, target 0.7930, stop-loss 0.7540, risk factor ***
EUR/GBP: long at 0.7295, target 0.7450, stop-loss 0.7220, risk factor *
EUR/CHF: long at 1.0570, target 1.0990, stop-loss 1.0400, risk factor **
AUD/JPY: long at 92.00, target 94.50, stop-loss 91.00, risk factor ***
Pending Orders
EUR/USD: buy at 1.0650, if filled - target 1.1000, stop-loss 1.0540, risk factor **
EUR/CAD: buy at 1.3560, if filled - target 1.3900, stop-loss 1.3460, risk factor *
Source: Growth Aces Forex Trading Strategies
EUR/USD: Strong Eurozone PMI Not Enough To Convince To Buy EUR
(buy at 1.0650)
[ul]
[li] Eurozone March manufacturing PM was at a 10-month high of 52.2, beating a flash reading of 51.9. It was the 21st month it has been above the 50 mark that separates growth from contraction.
[/li][li] The highest readings were recorded in Ireland and Spain. Improved growth was also seen in Germany, Italy and the Netherlands. The other nations covered by the survey France, Greece and Austria all saw their PMI readings remain below the neutral 50.0 mark.
[/li][li] March saw the sharpest increase in new export orders (including intra-Eurozone trade) since April 2014. Employment rose for the seventh successive month in March. Cost pressures picked up in March, with input prices posting a modest gain following declines in the prior six months. Although the increase in average purchase prices was only mild, it nonetheless reflected a sharp movement in the trend compared to the prior month.
[/li][li] PMI reading shows that Eurozone manufacturers are benefiting from the weaker EUR. Moreover, rising demand is helping firms to regain some pricing power.
[/li][li] Greek Economy Minister George Stathakis said that his country should reach a deal with its Eurozone partners and the International Monetary Fund next week. The list of proposed reforms Athens has presented to the Brussels Group includes revenues of EUR 1.5 billion from privatisations this year, including the long-term lease of 14 regional airports and the sale of its largest port Piraeus. Stathakis said the government had no plans to sell a majority 67% stake in Piraeus Port Authority but would seek a joint venture with investors in which it would retain a substantial stake.
[/li][li] The head of the European Central Bank Supervisory Council Daniele Nouy said that Greece’s banking sector was in a better state of solvency as a result of the recapitalisation that had been carried out under the Greek programme.
[/li][li] Richmond Fed President Jeffrey Lacker (voting, hawkish) said consumer spending, the labor market and other economic conditions have improved significantly over the last year. He predicted that the labor market and wages would continue to improve in the months ahead, with the economy growing between 2% and 2.5% for the year. He said moves in the USD and oil prices were likely transitory, so U.S. inflation should rise to the Fed’s 2% target. He added: I expect that, unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting. Lacker, who last year described himself as the Fed’s lone dissenter on its exit strategy from monetary stimulus, said he had still not decided whether he would dissent at the central bank’s June meeting if a majority of policymakers do not vote for a rate hike.
[/li][li] Jeffrey Lacker is probably the most hawkish FOMC member this year, who has long called for a prompt tightening of monetary policy. His opinions are predictable for the markets that is why they may be ignored by investors.
[/li][li] Kansas City Fed President Esther George (non-voting, hawkish) who has repeatedly backed an early mid-year hike, reiterated that it is time for the U.S. central bank to talk about a rate hike. She said she was “not bothered” by temporarily low inflation that she expects to rise back toward a 2% target.
[/li][li] U.S. consumer confidence unexpectedly rebounded strongly in March. The Conference Board consumer sentiment index rose to 101.3 from an upwardly revised 98.8 in February, above the median forecast for 96.0.
[/li][li] The EUR/USD and most EUR pairs saw some recovery as USD traded broadly weaker in Asia. Our trading strategy is to wait for lower levels to get long ahead of Fridays U.S. non-farm payrolls that in our opinion may be slightly below market expectations. We maintain our buy offer at 1.0650.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.0793 (21-dma), 1.0846 (high Mar 31), 1.0900 (high Mar 30)
Support: 1.0713 (low Mar 13), 1.0651 (low Mar 20), 1.0618 (low Mar 19)
GBP/USD: Political Worries Undermine Good Macro Data
(long under threat)
[ul]
[li] Britatins manufacturing PMI rose to 54.4 in March from 54.0 the month before. It is the highest level since July 2014. The strong domestic market remained the principal source of new contract wins. There was also some better news for exporters in the form of a modest increase in overseas demand following a slight dip in February. Companies reported improved order inflows from a broad range of nations including the USA, China, Germany, the Netherlands, Canada and the Middle East.
[/li][li] The index showed manufacturing employment increased for the twenty-third consecutive month in March, with further job creation recorded at both SMEs and large-scale producers.
[/li][li] The PMI suggests that output in Britain’s manufacturing sector grew by 0.6% qoq in the first quarter 2015, up strongly from 0.2% qoq in the last three months of last year.
[/li][li] GfK said its monthly consumer confidence index rose to +4 in March from +1 in February, its highest since June 2002. The survey showed households reported a greater willingness to spend and a more upbeat view of the economy. This has proven buoyant as a big fall in inflation and modest wage rises have boosted households’ disposable income.
[/li][li] The GBP depreciated strongly today despite very good macroeconomic data. The latest opinion polls before Britain’s May 7 election point to a hung parliament, in which no single party can form a government on its own, leaving open the possibility of a whole range of coalition agreements. The political uncertainty undermined good economic news for the GBP.
[/li][li] The GBP/USD rate fell today close to the stop-loss level of our long position. The GBP weakened also against the EUR, which is good news for our EUR/GBP long that has almost hit the stop-loss yesterday.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 1.4871 (hourly high, Apr 1), 1.4901 (high Mar 30), 1.4923 (high Mar 27)
Support: 1.4722 (low Mar 20), 1.4689 (low Mar 19), 1.4635 (low Mar 18)
USD/JPY: Japans Firms Plan To Cut Capex. Will BoJ Ease Again?
(short for 117.50)
[ul]
[li] The central bank released results of its quarterly Tankan survey. The headline index gauging big manufacturers’ sentiment was flat from three months ago at plus 12 in March, surprising markets that expected a 2-point improvement. Big non-manufacturers’ sentiment improved by 2 points to plus 19, beating a median forecast of 17 and matching a high hit in June 2014.
[/li][/ul]
[ul]
[li] Big firms expect to cut capital expenditure by 1.2% in the new fiscal year vs. market forecasts of a 0.5% increase.
[/li][li] Japans manufacturing PMI fell to 50.3 in March, just below the preliminary reading of 50.4, from 51.6 in February. The index remained above the 50 threshold that separates expansion from contraction for the tenth consecutive month.
[/li][li] The Tankan survey will be among data BOJ policymakers scrutinise at its rate review next week for clues on whether their massive monetary stimulus is working its way through wider sectors of the economy.
[/li][li] Kozo Yamamoto, a leading expert on monetary policy in Shinzo Abe’s ruling Liberal Democratic Party said the Bank of Japan must ease monetary policy further at its rate review on April 30 given signs of slowdown in the economy and prices. In his opinion the central bank has various tools available if it were to act again, such as topping up asset purchases of government bonds, corporate bonds and trust funds investing in property, diversifying the type of assets it targets or scrapping a 0.1% floor it sets on money market rates.
[/li][li] In the opinion of Yamamoto such measures are unlikely to spur an unwelcome sharp fall in the JPY, because the European Central Bank is pumping out money aggressively and the Federal Reserve will raise interest rates only gradually.
[/li][li] The Bank of Japan has stood pat since October’s action and signalled that no further stimulus is needed for now, insisting that rising wages and improvements in the economy will accelerate inflation toward its 2% target around this fiscal year ending March 2016.
[/li][li] In our opinion the bias on the USD/JPY remains down. However slightly weaker BoJ Tankan and suggestions that the BoJ is likely to ease again may weigh on the JPY. The technical situation supports our short position. The tankan and kijun lines are negatively aligned, reinforcing the bearish structure.
[/li][/ul]
Significant technical analysis’ levels:
Resistance: 120.37 (high Mar 31), 121.00 (psychological level), 121.20 (high Mar 20)
Support: 119.42 (session low Apr 1), 119.11 (low Mar 30), 119.00 (psychological level)