The Week Ahead: Focus On Non-Farm Payrolls

Article by: http://growthaces.com

EUR/USD

• The EUR/USD fell to its lowest level since June 2010 and there will be probably no good news for EUR bulls in the coming week.
• Investors will be focused mainly on two events this week: Euro zone inflation on January 7 and U.S. non-farm payrolls data on January 9. We forecast a drop in Euro zone inflation to -0.1% yoy in December from 0.3% yoy a month ago. The reading will be much below the ECB’s target of just under 2%. US jobs data will be probably much lower than in the previous month, when they jumped surprisingly to 314k. The median forecast this month is at 240k. Stronger jobs data will give the USD a boost.
• Forex trading strategy of GrowthAces.com is to sell the EUR/USD on upticks. We lowered our sell order to 1.2130. The next target of the EUR/USD bears will be 1.1950 (just below daily low on June 6, 2010).

GBP

• The GBP/USD broke below the strong support level at 1.5427 (low on August 28, 2013) and an important support level of 1.5375 (76.4% of 1.4814-1.7192) on Friday. The next support is situated at 1.5205 (low on August 7, 2013).
• The Bank Of England’s meeting is scheduled for this week (January 8). It is widely expected that the bank will keep interest rates unchanged. GBP traders will be focused also on industrial output data on Friday, January 9. The market expects a slight acceleration in production growth, however recent PMI reading might sow doubt among forecasters.
• Forex trading strategy of GrowthAces.com for the GBP/USD is to sell on upticks, in anticipation for a continuation of bearish trend.

JPY

• Bank of Japan Governor Haruhiko Kuroda supported our long USD/JPY position taken at 119.50 saying the bank has various tools left if it were to ease monetary policy again. In our opinion the short-term target of the USD/JPY bulls is 121.80 (2014 high). The medium-term outlook is also bullish. The JPY is likely to depreciate against most of major currencies as the Bank of Japan expanded its own programme to stimulate the domestic economy recently.

CAD

• Uptrend of the USD/CAD has been consolidating within the range of 1.1560 (low on December 17, 21-dma) and 1.1674 (2014 high). The rate broke above the upper limit of this area on Friday, which is a strong bullish signal and opens the way to further gains. We took profit on our USD/CAD long position at 1.1740.
• The most important events for CAD traders this week will be releases of jobs data in the United States and Canada on Friday. Forex trading strategy of GrowthAces.com is to get long again on dips. The next target will be 1.1990.

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