EUR/USD: PMI Data Add To Pressure On The ECB

Article by http://growthaces.com

GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2480, target 1.2330, stop-loss 1.2550

USD/JPY: long at 117.50, target 119.80, stop-loss 116.60

USD/CHF: long at 0.9600, target 0.9760, stop-loss 0.9580

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

EUR/GBP: short at 0.7990, target 0.7840, stop-loss 0.7980

GROWTHACES.COM Pending Orders

GBP/USD: sell at 1.5760, target 1.5580, stop-loss 1.5820

AUD/USD: sell at 0.8610, target 0.8315, stop-loss 0.8700

NZD/USD: sell at 0.7950, target 0.7760, stop-loss 0.8020

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EUR/USD: PMI Data Add To Pressure On The ECB

(stay short, the target is 1.2330)

• Euro zone PMI manufacturing amounted to 50.1, below its earlier flash estimate of 50.4 and October’s level of 50.6. Manufacturers recorded slower growth of output and falling levels of new business.
• The data showed that price pressures remained on the downside during November, as output charges and input costs both fell moderately for the third successive month.
• Austria and France remained at the foot of the PMI rankings in November. The German PMI slipped back below the 50.0 dividing line as output growth was the weakest since June 2013.
• Weak PMI data will add to pressure on the European Central Bank to do more to boost the economy. The ECB meets on Thursday. The bank will revise downwards its GDP and CPI projections. ECB President Mario Draghi will probably drop a hint of additional measures . However, we do not expect any immediate decision to broaden the asset purchase program.
• We keep our short EUR/USD position with the target at 1.2330.

Significant technical analysis’ levels:

Resistance: 1.2505 (low Nov 2), 1.2560 (30-dma), 1.2569 (high Nov 21)

Support: 1.2402 (low Nov 25), 1.2358 (low Nov 7), 1.2342 (low Aug 21, 2012)

GBP/USD: Profit Taken, Get Short Again At 1.5760

(sell at 1.5760)

• The Bank of England said that consumer lending rose at its fastest annual rate since July 2006, with credit expanding by 6.4% yoy.
• On the other hand, British lenders approved the fewest mortgages since June 2013 in October. Mortgage approvals for house purchase fell to 59,426 from September’s 61,234. Mortgage lender Nationwide said on Friday that mortgage approvals were running at just two thirds of historic rates, and that house prices in the three months to November increased at the slowest rate since June 2013.
• Britain’s manufacturing PMI rose to 53.5 from 53.3 in October, reaching its highest level in four months. The reading exceeded the median forecast of 53.0. The data showed growth in new orders helped push up employment in the sector to a four-month high.
• Our short GBP/USD position reached its target at 1.5650 on Friday. We are looking to get short again and placed the sell order at 1.5760. If filled our target is 1.5580.

Significant technical analysis’ levels:

Resistance: 1.5743 (high Nov 28), 1.5769 (21-dma), 1.5826 (high Nov 27)

Support: 1.5585 (low Dec 1), 1.5564 (low 6, 2013), 1.5556 (low Sep 4, 2013)

USD/JPY: New Seven-Year High After Moody’s Decision

(we stay long, the target is 119.80)

• Moody’s cut Japan’s rating to A1 from AA3 citing rising uncertainty over the country’s ability to hit its debt-reduction goal. The agency assigned a stable outlook to its debt.
• Moody’s said that while Abe’s decision to delay next year’s scheduled tax hike could support the economy in the short term, it had made it more challenging for Japan to achieve its target of balancing its budget by 2020.
• The Ministry of Finance showed Japanese companies raised spending on plant and equipment in July-September by 5.5% yoy. The rise followed a 3.0% yoy increase in the previous quarter. The data will be used to calculate revised GDP figures due on December 8. A preliminary estimate showed GDP contracting an annualized 1.6% in the third quarter.
• Japan’s manufacturing PMI amounted to 52.0 in November, less than a preliminary reading of 52.1 and lower than a final 52.4 in October. The reading suggests a modest economic recovery in the fourth quarter. The data showed input costs for Japanese goods producers rose at the fastest rate since January, as a further depreciation in the JPY offset weaker global commodities prices.
• The USD/JPY rose as high as 119.15, its highest since July 2007, after the Moody’s decision. The rate fell soon on profit taking below 118.10. In the opinion of GrowthAces.com the JPY will remain under pressure and the outlook for the USD/JPY is bullish. The target of our USD/JPY long is 119.80. We raised the stop-loss level to 117.60.

Significant technical analysis’ levels:

Resistance: 119.15 (high Dec 1), 119.77 (high Aug 9, 2007), 119.84 (high Aug 8, 2007)

Support: 118.07 (session low Dec 1), 117.89 (high Nov 27), 117.74 (low Now 28)

AUD/USD Dropped Ahead Of The RBA Decision

(sell at 0.8610)

• China’s PMI slipped to 50.3 in November from October’s 50.8 but remained above the 50-point level that separates growth from contraction on a monthly basis. The reading was lower than the median forecast of 50.6 pts. The AUD is sensitive to news out of China, Australia’s top export market.
• The Reserve Bank of Australia meets on Tuesday. We expect the cash rate to remain unchanged at 2.50%. The bank will likely maintain its conclusion that the most prudent course is likely to be a period of stability in interest rates. The RBA’s decision will probably not have a direct impact on the AUD/USD.
• The AUD/USD fell to a fresh four-year low of 0.8417 today. The AUD was hit by China’s data but also by drop in oil prices and iron ore futures.
• Our strategy is to sell the AUD/USD at 0.8610. If filled the target of our position is 0.8315 (low from July 2010).

Significant technical analysis’ levels:

Resistance: 0.8545 (high Nov 28), 0.8582 (10-dma), 0.8619 (high Nov 25)

Support: 0.8417 (low Dec 1), 0.8315 (low Jul 1, 2010), 0.8269 (low Jun 10, 2010)

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