GROWTHACES.COM Forex Trading Strategies
Taken Positions
EUR/USD: long at 1.0980, target 1.1300, stop-loss 1.0895, risk factor **
AUD/USD: long at 0.7845, target 0.8100, stop-loss 0.7780, risk factor ***
CHF/JPY: long at 129.10, target 131.40, stop-loss 127.90, risk factor **
AUD/JPY: long at 95.60, target 98.80, stop-loss 94.60, risk factor **
Pending Orders
GBP/USD: buy at 1.5460, if filled – target 1.5800, stop-loss 1.5365, risk factor **
USD/JPY: sell at 122.20, if filled - target 120.10, stop-loss 123.10, risk factor **
EUR/JPY: buy at 132.60, if filled – target 135.60, stop-loss 131.20, risk factor ***
EUR/CHF: buy at 1.0320, if filled – target 1.0510, stop-loss 1.0225, risk factor **
EUR/CAD: buy 1.3420, if filled – target 1.3700, stop-loss 1.3330, risk factor **
GBP/JPY: buy at 187.40, if filled – target 190.00, stop-loss 186.40, risk factor **
EUR/USD: Fed Poised To Raise Rates In 2015
(long at 1.0980)
- US CPI rose 0.1% mom in April, as expected and fell 0.2% yoy, which was below expectations for a fall of 0.1% mom. Core inflation amounted to 0.3% mom and 1.8% yoy vs. the market consensus of 1.7% yoy. April CPI got a big boost from housing charges (41.5% share in the inflation basket), which rose 0.2% mom, the fastest increase in six months.
- Federal Reserve Chair Janet Yellen reaffirmed the central bank's plans to raise interest rates this year despite new concerns that the nation's economic recovery may be slowing.
- Yellen said she expected the US economy to strengthen after a slowdown due to transitory factors in recent months, and noted that some of the weakness might be due to statistical noise. Yellen stressed that monetary policy must get out ahead of an economy whose future looks bright. The Fed chief said delaying a policy tightening until employment and inflation hit the central bank's targets risked overheating the economy.
- She said less progress had been made on lifting inflation, though she said the Fed believes it will rise to the central bank's medium-term 2% goal as oil prices rebound and other temporary factors dissipate. She also reinforced the view that rate hikes will depend on incoming economic data and that the tightening process, once it begins, is likely to be gradual.
- The US economy's recovery has not been as robust as many expected, dashing market expectations earlier in the year for the Fed to raise rates in June and prompting investors to push back their expectations to September or later. In our opinion the Fed will raise rates in September, while traders in futures markets held firm on December.
- The EUR/USD broke below the key support level of 1.1050 on Friday. We closed our previous long position at the entry level (1.1140)
- The daily low on May 20 (1.1062) is the nearest resistance level now and the nearest support is 1.0960 (low on April 29). In our opinion the EUR/USD will have the opportunity to regain some losses it suffered last week. We have US durable goods orders, new home sales, consumer confidence and revised GDP figure releases this week. The US data will probably not show a significant rebound in economic activity. We got long at 1.0980 and set the target at 1.1300. The stop-loss level is 1.0895.
Significant technical analysis' levels:
Resistance: 1.1062 (low May 20), 1.1208 (high May 22), 1.1243 (10-dma)
Support: 1.0964 (session low May 25), 1.0960 (low Apr 29), 1.0922 (55-dma)
USD/JPY: Sell Above March Highs
(sell at 122.20)
- Bank of Japan Governor Haruhiko Kuroda said on Monday that yoy changes in the overall consumer price index are likely to be around zero for the time being. In his opinion consumer prices are likely to start rising again once the impact from a decline in oil prices starts to fade. He added: “We expect inflation rate to start to accelerate in the second half of fiscal 2015 and reach around 2% in or around the first half of fiscal 2016.”
- Japan posted a trade deficit of JPY 53.4 billion in April compared with a JPY 227.4 billion surplus in March, the first in several years. But thanks to lower oil and gas prices, the deficit fell more than forecast, nearly 94% from April 2014, when the deficit was JPY 825.5 billion. In April, exports rose 8% yoy to JPY 6.55 trillion while imports dropped 4.2% to 6.6 JPY trillion.
- Japan's exports to the USA, Japan's biggest market, rose 21% yoy to JPY 1.36 trillion while imports from the USA rose 24%, to JPY 714.1 billion. Japan's exports to China edged up 2.4% to JPY 1.21 trillion, a slower pace than usual due to waning growth in Asia's biggest economy. Exports to all of Asia rose 6%, however, on rising shipments to Singapore, Vietnam and South Korea.
- The USD/JPY hit the stop-loss of our short position at 121.60. Japan’s macroeconomic data that will be published this week may bring some positive surprises which could encourage investors to buy JPY. In our opinion evels above March highs (122.04) could be a good opportunity to sell the USD/JPY.
Significant technical analysis' levels:
Resistance: 121.77 (session high May 25), 122.04 (high Mar 10), 123.00 (psychological level)
Support: 120.64 (low May 22), 120.58 (low May 20), 119.83 (low May 19)
USD/CAD: Loonie Hurt By CPI Data And Falling Oil Prices
(stop-loss hit, stay sideways)
- Canada's annual inflation rate cooled to 0.8% yoy in April, making for the smallest increase since October 2013, due to cheaper energy. That brought inflation below the lower end of the Bank of Canada's 1 to 3% target range and fell short of economists' forecasts for 1%.The core rate, which strips out volatile items and is closely watched by the bank, was firmer than the overall rate, edging down to 2.3% from 2.4% in March.
- Canadian retail sales rose 0.7% mom in March. The reading topped expectations for a modest gain of 0.3% mom.
- CPI data hurt the loonie on Friday. The USD/CAD broke above recent highs near 1.2260 and 38.2% fibo of 1.2835-1.1920 slide. The rate is going towards the resistance level at 1.2328 (high on April 16). Brent crude oil futures dipped below USD 65 a barrel as the USD strengthened today, with a public holiday in the United States and much of Europe keeping oil trading volumes muted. The CAD is highly correlated with oil prices and a fall in crude prices also added to pressure on the loonie.
- The Bank of Canada meets next Wednesday and is widely expected to keep interest rates unchanged at 0.75%. We do not expect surprises in the statement. It will probably reflect recent encouraging remarks made by BOC governor Poloz.
- We stay sideways on the USD/CAD after our short position hit the stop-loss at 1.2290. We will be looking to get short on higher levels, but the trade seems too risky now.
Significant technical analysis' levels:
Resistance: 1.2322 (high May 22), 1.2328 (high Apr 16), 1.2353 (low Feb 3)
Support: 1.2269 (high Apr 23), 1.2173 (low May 22), 1.2170 (low May 20)