Market Overview

Will Draghi Stop The USD Rally?

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GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2665, target 1.2510, stop-loss 1.2740

USD/CAD: long at 1.1150, target 1.1290, stop-loss 1.1060

AUD/USD: short at 0.8800, target 0.8650, stop-loss 0.8910

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

GBP/JPY: long at 176.60, target 180.00, stop-loss 175.20

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EUR/USD: Short at 1.2665, waiting for Draghi

(the target is 1.2510)

  • Euro zone factory prices fell slightly less than expected in August. PPI inflation amounted to -0.1% mom and -1.4% yoy vs. the median forecast of -0.2% mom.
  • The US ISM manufacturing index fell to 56.6 from 59.0 in August and was worse than the consensus forecast of a drop to 58.5. The drop in the employment index, to 54.6 from 58.1, could suggest weaker payroll employment in the manufacturing sector in September. In line with our estimates the ISM reading is still consistent with GDP growth at an annualised rate of more than 3%.
  • The ADP Employment Report for September showed a private sector payrolls gain of 213k, close to expectations. The August increase was revised down to 202k. The median of market expectations for Friday's Non-Farm Payrolls reading is now at 215k. GrowthAces.com forecasts the level of 230k that should be supportive for the USD.
  • EUR/USD climbed to 1.2676 today in Asia and we used higher level to get short. Our target is 1.2510.

Significant technical analysis' levels:

Resistance: 1.2715 (high Sep 29), 1.2732 (10-dma), 1.2761 (high Sep 26)

Support: 1.2571 (low Sep 30), 1.2561 (low Sep 6, 2012), 1.2502 (76.4% of 1.2042-1.3995)

 

AUD/USD firmer after macroeconomic data

(we went short at 0.8800, the target is 0.8650)

  • AUD/USD opened on Thursday at 0.8736 and traded 0.8726-0.8816 range in Asia. AUD/USD broke above 0.8760 before the trade and building approvals data were released.
  • Australian approvals to build new homes in August rose 3.0% mom (more than the median forecast of 1.0% mom) and faster than a month earlier (2.1% mom).
  • Australia's balance of goods and services amounted to AUD -0.787 bn. Exports totaled AUD 26.372 bn and imports AUD 27.159 bn. The median forecast assumed a deficit of AUD 0.700 bn.
  • Better than expected building approvals data gave AUD/USD another boost and the rate went over 0.8800. The AUD/USD reached the session high of 0.8816. In line with GrowthAces.com trading idea, we used the recovery to get short. Our target is 0.8650.

Significant technical analysis' levels:

Resistance: 0.8770 (high Sep 29), 0.8813 (high Sep 26), 0.8885 (high Sep 25)

Support: 0.8663 (low Oct 1), 0.8660 (low Jan 24), 0.8500 (psychological level)

 

USD/JPY failed to break above 110.00.

(we are flat now and see now major support levels nearby)

  • A central bank survey showed on Thursday Japanese companies expect consumer prices to rise an average 1.5% a year from now, unchanged from their projection three months ago. The release added more doubts over the Bank of Japan's pledge to achieve its 2% inflation target next year.
  • USD/JPY failed to break above 110.00 after Wednesday's Tankan release and the rate fell significantly below 109.00. Given the speed of the recent USD/JPY push up there is no major technical support and big figures till 106.82. That is why further downside move cannot be excluded.
  • We are flat now after taking small profit on our long position yesterday. On the other hand, our long EUR/JPY position has reached stop-loss level.

Significant technical analysis' levels:

Resistance: 109.97 (hourly high Oct 1), 110.09 (high Oct 1), 110.33 (high Aug 19)

Support: 109.56 (session low Oct 1), 109.19 (low Sep 30), 109.15 (10-dma)

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.

We encourage you to subscribe to our daily forex newsletter on http://growthaces.com to get daily analysis for forex traders. We intend that our consultancy should help you make better decisions. At GrowthAces.com we give our best to you - always greatest quality, usefulness and profitability.

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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