Article by http://growthaces.com

GROWTHACES.COM Trading Positions

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

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

USD/CHF: long at 0.9750, target 0.9900, stop-loss 0.9700

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

GBP/JPY: long at 187.50, target 191.50, stop-loss 186.70

GROWTHACES.COM Pending Orders

USD/JPY: buy at 119.50, target 123.80, stop-loss 118.80

USD/CAD: buy at 1.1420, target 1.1600, stop-loss 1.1380

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

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EUR/USD: The Next Target Is 1.2140

(we got short at 1.2320)

• Atlanta Federal Reserve Bank President Dennis Lockhart (dove, voter in 2015) said he saw no rush to remove language from the central bank’s policy statement that there remains a “considerable time” before the first interest rate increase. He said he will watch the behavior of prices in coming months and wants to be confident inflation will rise to the Fed’s two percent target before committing to an initial rate increase. He said he expects that to happen and anticipates the Fed will be able to approve an initial rate increase sometime in the second half of 2015.
• San Francisco Fed President John Williams (dove, voter in 2015) said the timing of the Fed’s interest-rate hikes will be driven by economic data, and will be a “gradual process.” He sees mid-2015 as a “reasonable guess” on when the Fed could be expected to start raising interest rates.
• The Fed’s policy committee meets next week. The Fed reiterated in October it plans to keep rates at their current near-zero level for a “considerable time,” and is expected to debate that forward guidance at the nearest meeting. Getting rid of the ‘considerable time’ language would be an initial signal of the tightening cycle.
• While the Fed’s statement is getting more hawkish, the European Central Bank plans to expand its balance sheet. Executive Board member Benoit Coeure said the ECB policymakers agreed unanimously last week they would assess how and when to react to downward inflation risks in early 2015, and that they could then change their asset buying plans.
• The EUR/USD recovered yesterday, as expected. However, the rate is under pressure of the guesswork that the Fed removes a “considerable time” from its statement next week. The EUR/USD reached today’s high at 1.2367. The next resistance level is 1.2384 (200-hma) and 1.2393 (daily high, December 5).
• We got short on the EUR/USD at 1.2320, in line with our yesterday’s strategy. We set the target at 1.2140 (just above lows from August 2012).

Significant technical analysis’ levels:

Resistance: 1.2384 (200-hma), 1.2393 (high Dec 5), 1.2425 (10-dma)

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

GBP/USD: Buy GBP But Not Against The USD

(GBP/USD short, but GBP/JPY long and EUR/GBP short)

• British industrial output unexpectedly fell in October 0.1% mom and rose 1.1% yoy vs. expected rise of 0.2% mom and 1.8% yoy. The output increased by 0.8% yoy in September. Manufacturing output tumbled 0.7% mom – its biggest monthly decline since May – hit by a 4.5% mom fall in computer, electronic and optical products. The Office for National Statistics said there was no sign of significantly different levels of demand for British exports.
• Despite today’s numbers, Britain looks set to grow more strongly than main trading partners in the euro zone. The PMI index published last week showed British manufacturing held up in November as demand from domestic orders softened the hit to factories from a fall in export orders.
• The GBP/USD is still under pressure of expectations the Federal Reserve will hike rates before the Bank of England. We got short on the GBP/USD at 1.5670 yesterday using the short-lived recovery of the rate. The medium-term outlook is bearish. We set the target of our position at 1.5520.
• In the opinion of GrowthAces.com the GBP is still likely to outperform other major currencies (EUR, CHF, JPY). That is why we are looking to get short on the EUR/GBP. We also got long on the GBP/JPY at 187.50 today and set the target at 191.50.

Significant technical analysis’ levels:

Resistance: 1.5696 (high Dec 5), 1.5697 (21-dma), 1.5725 (high Dec 4)

Support: 1.5626 (low, Dec 9), 1.5541 (low Dec 8), 1.5507 (low Sep 2, 2013)

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