GROWTHACES.COM Trading Positions
EUR/USD: short at 1.2480, target 1.2330, stop-loss 1.2550
GBP/USD: short at 1.5760, target 1.5580, stop-loss 1.5820
USD/JPY: long at 117.50, target 119.80, stop-loss 118.00
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
USD/CAD: buy at 1.1280, target 1.1450, stop-loss 1.1220
AUD/USD: sell at 0.8570, target 0.8315, stop-loss 0.8630
NZD/USD: sell at 0.7950, target 0.7760, stop-loss 0.8020
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EUR/USD: Hawkish Dudley, Hawkish Fischer, Time For Yellen
(stay short, the target is 1.2330)
- New York Fed President William Dudley (a permanent vote on Fed monetary policy) said the central bank will unleash more aggressive rate rises if financial markets do not tighten as expected, and vice versa. He flagged short- and long-term interest rates, equities, credit spread and availability, and the dollar as areas the Fed will watch. Dudley repeated it seems reasonable to expect liftoff from near-zero rates around mid-2015.
- In the opinion of Dudley the recent drop in energy prices is positive for the U.S. economy because much of the extra money will be spent by Americans. He said that the global price drop will also spur more monetary easing by other central banks, spurring global growth. He expects U.S. inflation to rise toward a 2% target next year despite recent softening.
- Federal Reserve Vice Chairman Stanley Fischer said recent drop in oil prices would be a temporary drag on inflation. In his opinion the USA may be on the verge of a long-awaited jump in wages.
- Comments from Dudley and Fischer were rather hawkish. Today, traders are waiting for Janet Yellen's speech (13:30 GMT).
- The U.S. ISM Manufacturing PMI for November was almost unchanged, down to 58.7 from October's 59.0. The reading was better than expectations, with the median estimate of 57.8. The new orders index climbed to 66.0 from 65.8. That was the second-highest level since August 2009.
- The EUR/USD is getting lower. The EUR bears are supported by weaker Euro zone PMI data, stronger-than-expected U.S. ISM reading and hawkish comments from the Fed officials. Janet Yellen is in the spotlight today and we have also very important ECB meeting ahead of us (Thursday), at which Mario Draghi is likely to drop a hint of further stimulus. In our opinion the short-term outlook for the EUR/USD is bearish and we stay short with the target at 1.2330.
Significant technical analysis' levels:
Resistance: 1.2507 (high Dec 1), 1.2520 (30-dma), 1.2532 (high Nov 26)
Support: 1.2402 (low Nov 25), 1.2358 (low Nov 7), 1.2342 (low Aug 21, 2012)
AUD/USD: Short-Lived Recovery After RBA Decision
(sell at 0.8570)
- The Reserve Bank of Australia kept interest rates unchanged on Tuesday. The cash rate has been at 2.5% since August last year. The RBA repeated the currency was overvalued given the ongoing slide in prices for many of the country's commodity exports. The bank stuck to its steady outlook for interest rates, disappointing speculators who had looked for a hint of a future cut given recent steep falls in resource prices .
- The RBA Governor Glenn Stevens said: "Overall, the Bank still expects growth to be a little below trend for the next several quarters."
- Approvals to build new homes surged 11.4% mom in October vs. the median forecast of 5.0% mom, completely reversing a big fall in September. The GDP report is due on Wednesday (0:30 GMT).
- The AUD gained a little ground after the decision of the RBA, but the recovery was short-lived. The rate edged up to 0.8542, but settled back at levels it traded prior to the decision soon. The AUD did not get any boot from yesterday's gain in commodity and precious metal prices.
- We lowered our sell order to 0.8570. If filled the target is 0.8315.
Significant technical analysis' levels:
Resistance: 0.8545 (high Nov 28), 0.8564 (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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