Market Overview

EUR/USD Slightly Weaker After Ifo Data

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GROWTHACES.COM Trading Positions:

GBP/USD: long at 1.6320, target 1.6540, stop-loss 1.6210

EUR/CHF: long at 1.2085, target 1.2160, stop-loss 1.2045

USD/JPY: long at 108.45, target 110.50, stop-loss 107.70

NZD/USD: long at 0.8100, target 0.8300, stop-loss 0.8000

 

EUR/USD slightly weaker after Ifo data

(consolidation and building up the energy to go up)

  • The German IFO index has come in at 104.7 weaker than the 105.7 that was expected and follows 106.3 in August. The breakdown shows expectations index fell to 99.3 from 101.7 in the previous month and current conditions index declined to 110.5 from 111.1 a month earlier. At this level, the index has historically been consistent with GDP growth no more than 1%.
  • Germany's BDI industry association is calling for an "investment offensive" from the Federal Government, saying that strengthening business confidence should be a top priority amid the economic downturn. The BDI group recently dropped its growth prediction for the current year to only 1.5%. The association's previous estimate was 2%. The BDI president called the Transatlantic Trade and Investment Partnership (TTIP) between the EU and United States, "a historic opportunity". German Chancellor Angela Merkel renewed her praise for TTIP as an instrument of trade. In light of weak growth in Europe, she was particularly positive about the opportunities TTIP offers. Everything should be done, she said, to interconnect the two biggest markets with a free trade agreement.
  • European Central Bank governor Mario Draghi reiterated today that euro zone monetary policy would remain accommodative for a long period and that the goal was to push ultra-low inflation back up closer to the two percent level.
  • Despite weak Euro zone data and dovish ECB the EUR/USD continues its consolidation in the range of 1.2840/2900. GrowthAces.com expects that the EUR/USD is likely to consolidate for a short time in this area before building up the energy to go up.

Significant technical analysis' levels:

Resistance: 1.2901 (high Sep 23), 1.2929 (high Sep 19), 1.2931 (high Sep 18)

Support: 1.2843 (session low Sep 23), 1.2824 (hourly low Sep 22), 1.2816 (low Sep 22)

 

USD/JPY: Short-term corrective phase before further move north.

(still bullish, the target is 101.50)

  • The PMI manufacturing fell to 51.7 in September from a final reading of 52.2 in August, but remained above the 50 threshold that separates expansion from contraction for a fourth straight month.
  • An improving corporate sector is certainly welcome news for the government, which is monitoring third-quarter economic data to decide whether to raise the sales tax again. From July to September, the manufacturing PMI averaged 51.5, which is higher than the April-June average of 50.3. We should see a recovery in the third quarter after the economy contracted sharply in the second quarter.
  • Japan Prime Minister Abe said that he would remain watchful of the ill effects of recent JPY weakness on local economies. The USD/JPY slipped from around 108.80 to 108.46 after Abs was quoted. Abe is probably concerned not about the fact that JPY was weakening but the pace of the move. The USD/JPY steadied near 108.50.
  • GrowthAces.com remains long at 108.45. The market has been in a short-term corrective phase but general outlook is still bullish and technical situation supports our forecast of further gains.

Significant technical analysis' levels:

Resistance: 108.99 (high Sep 23), 109.20 (high Sep 22), 109.46 (high Sep 18)

Support: 108.46 (session low Sep 24), 108.25 (session low Sep 23), 108.13 (10-dma)

 

GBP/USD: Eyes on Mark Carney's speech on Thursday.

(break above the resistance at 1.6400 will open the way for further gains)

  • Bank of England Governor Mark Carney is set to speak in Wales on Thursday and is expected to a little light on timing of a rate hike. The speech is likely to give some support to the GBP.
  • The GBP/USD is testing the resistance at 1.6400 again. The nearest resistance is at 1.6445 (30-dma) and the next on is expected at 1.6487 the 38.2% of the 1.7192-1.6052. The nearest support level is psychological level of 1.6300.
  • Growth Aces remain long on the GBP/USD and keep the target at 1.6540 .

Significant technical analysis' levels:

Resistance: 1.6445 (30-dma), 1.6487 (38.2% of 1.7192-1.6052), 1.6525 (high Sep 19)

Support: 1.6300 (psychological level), 1.6291 (10-dma), 1.6285 (low Sep 22)

 

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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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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