Aritcle by http://growthaces.com

GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2425, target 1.2260, stop-loss 1.2410

USD/JPY: long at 119.70, target 121.90, stop-loss 119.10

USD/CHF: long at 0.9680, target 0.9810, stop-loss 0.9690

EUR/CHF: long at 1.2025, target 1.2095, stop-loss 1.1995

GROWTHACES.COM Pending Orders

GBP/USD: sell 1.5720, target 1.5560, stop-loss 1.5780

USD/CAD: buy at 1.1330, target 1.1460, stop-loss 1.1280

EUR/GBP: sell at 0.7960, target 0.7810, stop-loss 0.8020

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EUR/USD: ECB’s QE Is Coming, Watch Non-Farm Payrolls

(stay short, target is 1.2260)

• ECB President Mario Draghi disappointed the market and did not drop any hint about additional measures. He delayed the decision on a broadening of the purchase program next quarter (either January or March). Draghi said there was no need for unanimity within the ECB to launch full-blown quantitative easing. The President signaled that he would not allow opposition from Germany or other individual members to stop the QE.
• The ECB statement contains only a small but important change in its rhetoric. The ECB “intends” rather than “expects” to move its balance sheet towards the size it had at the beginning of 2012. Mario Draghi explained: an intention is more than an expectation, but less than a target.
• Mario Draghi buys time because the ECB needs more time to assess the effectiveness of the actions already undertaken. The ECB wants also to assess the scale of the impact of lower oil prices on the economic growth and inflation outlook. Mario Draghi said the ECB will be “particularly vigilant” on oil prices. It is worth noting that the word “vigilant” was previously regularly used by the ECB as a signal of a policy change at the following meeting.
• ECB Governing Council member Ewald Nowotny said today: “The position of the ECB Governing Council was not to fire quick shots, but rather see what develops on the economic side and leave open the possibility to think further about other considerations next year.”
• In the opinion German Finance Minister Wolfgang Schaeuble expansive monetary and fiscal policies are a cause of economic problems, not a solution to them. Bundesbank President Jens Weidmann said: “We have a monetary policy which is too expansive for Germany.” In his opinion low interest rates can result in lower willingness to make structural reforms.
• The next ECB meeting is scheduled for January 22. What can we expect? A launch of quantitative easing in January is very possible. However, we still do not know what form it will take.
• The EUR/USD jumped to 1.2456 after Draghi’s press conference yesterday. GrowthAces.com took profit on our previous EUR/USD short position (1.2480-1.2360) after the rate reached the stop-loss at 1.2360. GrowthAces.com got short again at 1.2425. We set the target originally at 1.2330, but we see rising expectations for ECB launching quantitative easing as soon as in January. That is why we have lowered the target to 1.2260 and the stop-loss to 1.2410.
• Investors are focused on U.S. Non-farm Payrolls Data today (13:30 GMT). The median forecast is 230k, but in our opinion the reading is likely to be slightly better. This would spur another round of USD buying and the EUR/USD may break below 1.2300 level. In case of weaker-than-expected reading the EUR/USD is likely to test the resistance level at 1.2426 (10-dma).

Significant technical analysis’ levels:

Resistance: 1.2426 (10-dma), 1.2453 (21-dma), 1.2476 (high Dec 2)

Support: 1.2280 (low Dec 4), 1.2256 (low Aug 16, 2012), 1.2242 (low Aug 10, 2012)

USD/JPY In Bullish Trend

(short- and medium-term outlook is bullish)

• According to most recent projections the Prime Minister Shinzo Abe’s Liberal Democratic Party could garner 300 or more of the 475 seats in parliament’s lower house in the Dec. 14 poll. Including the smaller Komeito party would almost certainly take the ruling alliance above the 317-seat threshold it needs for a super majority with veto powers over the upper house.
• Japan’s index of coincident economic indicators increased a preliminary 0.4 point mom in October, rising for a second straight month. Index of leading economic indicators slipped 1.6 points in October from the previous month.
• We got long again on the USD/JPY at 119.70 and set the target at 121.90. In our opinion the short- and medium-term outlook for the rate is bullish. The short-term target for USD/JPY bulls is 121.06 (the resistance level at 76.4% of the 135.20-75.31 slide). The most important event for the USD/JPY traders is the release of U.S. Non-Farm Payrolls report. Strong U.S. numbers will be supportive for USD/JPY bulls.

Significant technical analysis’ levels:

Resistance: 121.00 (psychological level), 121.06 (76.4% 135.20-75.31), 122.00 (psychological level)

Support: 119.71 (session low Dec 5), 119.33 (low Dec 4), 119.13 (low Dec 3)

GrowthAces.com is an independent macroeconomic research consultancy for traders. We offer you daily forex analysis with forex trading signals. The service covers forex forecasts and signals for following currencies: EUR, USD, GBP, JPY, CAD, CHF, AUD, NZD as well as emerging markets. Our subscribers should expect to receive: forex trading strategies, latest price changes, support and resistance levels, buy and sell forex signals and early heads-up about the potential fx trading opportunities. GrowthAces.com offers also daily macroeconomic fundamental analysis that enables you to see fundamental changes on forex market. We provide in-depth analysis of economic indicators resulting from knowledge, experience, advanced statistics and cutting-edge quantitative tools.

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