Article by http://growthaces.com

GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2480, target 1.2260, stop-loss 1.2400

GBP/USD: short at 1.5760, target 1.5560, stop-loss 1.5700

USD/JPY: long at 117.50, target 119.80, stop-loss 119.00

USD/CHF: long at 0.9600, target 0.9830, stop-loss 0.9700

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

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

AUD/USD: sell at 0.8550, target 0.8315, stop-loss 0.8610

We encourage you to visit our website http://growthaces.com and subscribe to our newsletter to receive trading positions summary for major pairs and crosses.

EUR/USD: Stay Short Ahead Of Crucial ECB Meeting

(target lowered to 1.2260)

• William Dudley, head of the Federal Reserve Bank of New York, said he expects the U.S. economy to grow at a rate of between 2.5 to 3.0% next year. He added that U.S. consumers and major trade partners Europe and Japan, which are net importers, would benefit from cheaper oil.
• U.S. Federal Reserve vice chair Stanley Fischer was less hawkish than on Monday. He said that if inflation fails to increase the central bank will need to leave rates at their current low levels. The Fed is currently expected to approve an initial interest rate increase in the second half of next year.
• U.S. Fed Chair Janet Yellen made no comment on current economic conditions or the outlook for monetary policy in her yesterday’s speech.
• The fall in November’s final composite PMI to 51.1 from 52.1 in October was bigger than indicated by the flash reading of 51.4.
• The economic activity in the core Euro zone economies deteriorated. The final reading for Germany’s composite PMI came in at 51.7, down from the flash estimate of 52.1 and a 17-month low. the French composite PMI was revised down to 47.9, from the flash estimate of 48.4 and October’s 48.2.
• Euro zone retail sales grew by a lower-than-forecast 0.4% mom in October (the median forecast of 0.6% mom) after a fall by 1.2% a month earlier. Sales of non-food products, and fuel at petrol stations made the biggest contribution to the monthly rise of the index in October, with Finland and the euro zone’s biggest economy, Germany, reporting the biggest gains.
• Today’s Euro zone data put more pressure on the ECB to provide additional monetary stimulus. The ECB announces its decision at 12:45 GMT tomorrow and Mario Draghi’s press conference is scheduled for 13:30 GMT. Draghi is expected to pave the way for more easing measures in the euro zone. In his press conference following the ECB decision on November 6, he said the governing council was unanimous in its commitment to using additional non-standard measures, and that he had tasked ECB staff with preparing further measures if needed. On November Draghi said in Frankfurt: “The ECB will do what it must to raise inflation and inflation expectations as fast as possible.” The ECB will present its updated macroeconomic forecast tomorrow. The central bank will certainly cut its GDP growth and inflation outlook.
• The EUR/USD fell to a 27-month low a day ahead of a very important ECB meeting. We have lowered the target of our short EUR/USD position to 1.2260 and the stop-loss to 1.2400.

Significant technical analysis’ levels:

Resistance: 1.2419 (low Dec 1), 1.2449 (10-dma), 1.2461 (21-dma)

Support: 1.2295 (low Aug 20, 2012), 1.2288 (low Aug 17, 2012), 1.2256 (low Aug 16, 2012)

USD/CAD: Focus On Today’s BOC Meeting

(buy at 1.1330)

• The Bank Of Canada meets today. The decision will be announced at 15:00 GMT. We expect the statement of the central bank to be kept broadly unchanged from 22 October. However, BOC governor Stephen Poloz is likely to refer to falling oil prices declining Canada’s terms of trade. In October, Poloz warned if the low oil prices lingered at depressed levels they could cut the growth of Canada’s GDP by a quarter-point next year.
• On the other hand, he can also emphasize the beneficial impact a drop in oil prices will have on consumers and the fact it should translate into either higher consumer spending. He is also likely to add falling oil prices and declining global growth to downside risks on inflation forecasts.
• Signs of a recovery in the Canadian labour market have appeared in the data since the central bank’s last policy rate announcement in October. Unemployment rate has dipped to 6.5%. The data showed also GDP growth climbed to 2.8% yoy in the third quarter, much more than expected.

• The USD/CAD traders are also waiting for Friday’s Canadian employment data. After strong figures for October, November is likely to bring stabilization on the labor market.
• We have raised our USD/CAD bid to 1.1330. If filled the target is 1.1460.

Significant technical analysis’ levels:

Resistance: 1.1412 (session high Dec 3), 1.1425 (high Dec 2), 1.1459 (high Dec 1)

Support: 1.1319 (low Dec 2), 1.1314 (low Dec 1), 1.1300 (psychological level)

AUD/USD Hit New 4-Year Low After GDP Data

(sell 0.8550)

• Australia’s economic growth amounted to 0.3% qoq and 2.7% yoy vs. the market forecast of 3.1% yoy and growth of 2.7% yoy in the second quarter. Total capital formation contracted 2.5% in the third quarter after the 1.2% gain in the second quarter. Household consumption rose 0.5% in Q3 after the 0.8% rise in the April-June period.
• In seasonally adjusted terms, the main contributors to the quarterly increase in expenditure on GDP were net exports (0.8 percentage points and final consumption expenditure (0.4 percentage points). The main detractors were private gross fixed capital formation (-0.5 percentage points) and public gross fixed capital formation (-0.2 percentage points).
• As a major commodity exporter Australia benefited hugely from the China-driven boom in prices of the last decade. The Australian mining boom is in reverse and terms of trade is getting worse due to falls of commodities prices.

• The AUD/USD tumbled to 4-year lows at 0.8392 after a surprisingly soft reading on economic growth prompted markets to raise the chance of an interest rate cut next year.
• In our opinion the AUD/USD is likely to go as low as 0.8315 (daily low Jul 1, 2010). However, we are waiting for higher levels to get short. We have lowered our sell order to 0.8550.

Significant technical analysis’ levels:

Resistance: 0.8545 (high Nov 28), 0.8564 (10-dma), 0.8619 (high Nov 25)

Support: 0.8315 (low Jul 1, 2010), 0.8269 (low Jun 10, 2010), 0.8195 (low Jun 9, 2010)

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