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GROWTHACES.COM Trading Positions

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

GROWTHACES.COM Pending Orders

EUR/USD: sell at 1.2320, target 1.2140, stop-loss 1.2390

GBP/USD: sell at 1.5670, target 1.5520, stop-loss 1.5720

USD/JPY: buy at 120.40, target 123.80, stop-loss 119.60

USD/CAD: buy at 1.1380, target 1.1600, stop-loss 1.1320

EUR/GBP: sell at 0.7930, target 0.7780, stop-loss 0.7990

AUD/JPY: long at 100.10, target 102.00, stop-loss 99.80

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EUR/USD: Profit Taken. Get Short On Upticks.

(sell at 1.2320)

• The Bureau Of Labour Statistics said that non-farm payrolls jumped 321k in November, much above the consensus estimate of 230k. That was the best reading since January 2012. The unemployment rate held steady at 5.8%, average hourly earnings increased 0.4% mom (0.2% mom expected), and the workweek came in at 34.6 hours (vs. 34.5 hours in October).

• Cleveland Fed President Loretta Mester said she was more optimistic about the economy than most of her colleagues at the U.S. central bank, and would probably be willing to tighten monetary policy sooner. But as the Fed approaches a key policy meeting on December 16-17, she has not decided whether to dissent if the message remains too dovish for her taste.
• On the other hand ECB policymaker and head of Austria’s central bank Ewald Nowotny said extending European Central Bank asset purchases to government bonds, or quantitative easing, can play a valuable role in addressing the economic weakness of the euro zone.
• German industrial output rose in October by 0.2% mom. The reading was slightly worse than expected (0.3% mom).
• The EUR/USD weakened significantly after strong U.S. non-farm payrolls data on Friday. The EUR depreciation was continued today and the rate fell as low as 1.2247. Our EUR/USD short reached the target at 1.2260 and we have taken 1.2425-1.2260 profit.
• The EUR/USD is likely to fall further in the medium term due to expected divergence in monetary policies (confirmed by comments From Fed’s Mester and ECB’s Nowotny). However, in the coming days a slight recovery of the EUR/USD is likely. In the opinion of GrowthAces.com getting short on upticks could be a good idea. We placed our sell order at 1.2320. If filled the target is 1.2140.

Significant technical analysis’ levels:

Resistance: 1.2304 (hourly high Dec 8), 1.2393 (high Dec 5), 1.2399 (10-dma)

Support: 1.2242 (low Aug 10, 2012), 1.2167 (low Aug 3, 2012), 1.2133 (low Aug 2, 2012)

USD/JPY: Buy Again At 120.40

(profit taken at 121.10, get long again on dips)

• Japan’s economy shrank more than initially reported in the third quarter. The revision to an annualised 1.9% contraction from a preliminary 1.6% fall confirmed Japan backed Prime Minister Shinzo Abe’s recent decision to delay a second sales tax hike. The key factor behind the GDP downgrade was stronger decline in business investment.

• The monthly Tankan sentiment index for manufacturers fell to 10 in December from 13 in November. Manufacturers expect a further decline to 7 in March. The index for services rose to 23 in December from 18 in November. The survey indices subtract the percentage of companies saying conditions are improving from that of companies saying conditions are worsening. A positive number means optimists outnumber pessimists.
• Japan’s current account recorded a surplus for the fourth straight month in October. The surplus stood at JPY 833.4 bn against the median forecast of JPY 366.3 bn. In the same period a year earlier, the current account logged a deficit of JPY 154.3 bn.
• The USD/JPY jumped after better-than-expected U.S. non-farm payrolls data on Friday. The rate reached today’s high at 121.86 (slightly below the 112.90 target of our long position). The reaction to weak GDP reading was limited and the rate fell on profit taking by longs. We have taken profit on our USD/JPY long position (119.70-121.10) after the JPY reached the stop-loss at 121.10.
• In the opinion of GrowthAces.com the medium-term outlook remains bullish and the scope is for gains to 124.14 (high, Jun 2007). We placed our bid at 120.40.

Significant technical analysis’ levels:

Resistance: 121.86 (high Dec 8), 122.00 (psychological level), 123.00 (psychological level)

Support: 120.98 (hourly low Dec 5), 120.00 (psychological level), 119.71 (low Dec 5).

USD/CAD: Soft Oil Weakens The Loonie

(buy at 1.1380)

• Canada lost 10.7k jobs in November after two consecutive months of big gains (an increase of 5k was expected), and the unemployment rate rose to 6.6% from 6.5% in October. Full-time employment grew by 5.7k jobs while part-time work dropped by 16.3k jobs. The goods-producing sector added 17.3k posts while the services sector lost 28k. The 12-month gain was 146,000 positions, an increase of 0.8% mom. The labor participation rate, which is of particular interest to the central bank, stayed at 66.0%, the lowest since November 2001. Let us remind that the Bank of Canada said on Wednesday that the labor market continued to show significant slack.

• Canada’s trade surplus in October shrank to CAD 99 mn from CAD 307 mn in September mainly due to strong rise in imports. Imports increased 0.5% mom to a record CAD 44.82 bn, in part due to higher shipments of consumer goods. Exports grew by 0.1% mom to CAD 44.92 bn on greater trade in industrial machinery, equipment and parts.
• Bank of Canada Governor Stephen Poloz said the slide in oil prices will probably cut Canadian growth by 1/3 of a percentage point in 2015, not the 1/4 point estimated in late October. However, in his opinion, U.S. economic growth is a little stronger than previously forecast and this should offset some of the downward pressure from cheap oil.
• The USD/CAD rose on Friday after surprisingly strong U.S. non-farm payrolls data, but a slight weaker reading of Canadian employment (after two months of big gains) had been already “priced in”. As a result the USD/CAD hit Friday’s high at 1.1476 (new 2014 high), but the jump of the rate was short-lived and the USD/CAD went down near 1.1430 soon.
• The CAD is likely to outperform other major currencies (EUR, CHF, JPY) due to expected divergence in monetary policies, but will be probably still weakening against the USD. We are looking to get long on USD/CAD at 1.1380.

Significant technical analysis’ levels:

Resistance: 1.1459 (session high Dec 8), 1.1476 (high Dec 5), 1.1500 (psychological level)

Support: 1.1383 (low Dec 5), 1.1341 (low Dec 4), 1.1319 (low Dec 2)

AUD/USD Hit By Weak China’s Imports

(slight recovery possible in the short-term)

• China’s exports rose 4.7% yoy in November, while imports dropped 6.7% yoy, well below expectations of a 3.9% yoy rise. China is the main export market of Australia. The softness in China is one reason investors have recently returned to pricing in a rate cut in Australia.
• The hawkish turn in Fed expectations and a dovish turn in RBA expectations resulted in bearish sentiment towards the AUD. The nearest strong technical support is at 0.8066 (low May 25, 2010). One of the most important event this week for the AUD traders will be the release of Australia’s employment figures (on Thursday 01:30 GMT). The market expects slightly worse reading than a month earlier.
• In our opinion this week may bring some profit taking on AUD-selling positions and a slight recovery of the AUD/USD.

Significant technical analysis’ levels:

Resistance: 0.8398 (high Dec 5), 0.8445 (10-dma), 0.8470 (high Dec 3)

Support: 0.8195 (low Jun 9, 2010), 0.8082 (low Jun 7, 2010), 0.8066 (low May 25, 2010)

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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