EUR/USD: Short Again, The Target Is 1.2350.

GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2530, target 1.2350, stop-loss 1.2610

GBP/USD: long at 1.5970, target 1.6130, stop-loss 1.5920

EUR/CHF: long at 1.2085, target 1.2100, stop-loss 1.2045

AUD/NZD: long at 1.1220, target 1.1500, stop-loss 1.1080

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EUR/USD: Short again, the target is 1.2350.

(we went short at 1.2530, the target is 1.2350)

• The European Commission released its revised macroeconomic forecasts. The forecasts show sharply lower growth in the Euro zone (1.1% vs 1.7% previously) and inflation (0.8% vs 1.2% previously) for 2015. There is an optimistic forecast that economic growth will bounce back to 1.7% in 2016 but inflation at 1.5% is still expected to be below 2% in 2016.
• Sharp downward revisions were recorded for France and Germany. The European Commission expects growth at the level of 0.7% in 2015 vs. 1.5% previously for France and 1.1% in 2015 vs. 2.0% previously for Germany.
• Euro zone producer prices went up by 0.2% mom and fell by 1.4% yoy in September vs. the median forecast of -1.5% yoy and August’s reading of -1.4% yoy.
• Downward revisions of macroeconomic forecasts are likely to intensify expectations that the ECB will expand its monetary stimulus. The ECB meeting is scheduled for Thursday. We do not expect anything extraordinary from the ECB president Mario Draghi. He is likely to underline that accommodative policy will be continue. He is also likely to comment on recent slightly better data from the euro zone and that would be supportive for the EUR/USD.
• The medium-term outlook for the EUR/USD is bearish. We have taken short position on the EUR/USD at 1.2530 and set the target at 1.2350.

Significant technical analysis’ levels:

Resistance: 1.2545 (hourly high Oct 31), 1.2591 (hourly high Oct 31), 1.2614 (low Oct 23)

Support: 1.2439 (low Nov 3), 1.2431 (low Aug 22, 2012), 1.2342 (low Aug 21, 2012)

AUD/USD: No surprise in the RBA statement

(bearish outlook)

• Australia’s central bank kept its cash rate steady at a record low of 2.5%, as widely expected. RBA Governor Glenn Stevens said: “Overall, the Bank still expects growth to be a little below trend for the next several quarters. (…) On present indications, the most prudent course is likely to be a period of stability in interest rates.” Stevens said the currency was still above most estimates of its fundamental value. The strong drop in prices for commodities is a major reason the RBA has been agitating for a greater decline in the AUD. The RBA refrained from stepping up its warnings about a strong currency.
• The Australian Bureau of Statistics released revised figures for employment that showed the labour market was weaker than first reported over August and September. The new figures estimated 23.7k jobs had been lost in September, compared to the initial estimate of a fall of 29.7k. However, August was restated to show a drop of 9.0k, compared to a previous rise of 32.1k. The unemployment rate increased to 6.2% in September and 6.1% for August, compared to a previous estimate at 6.1% and 6.0% respectively.
• Retail sales jumped by 1.2% mom in September vs. the median forecast of 0.4% mom.
• The AUD/USD opened at 0.8680 in Asia. The AUD/USD reached a day’s low at 0.8644 after the Australian Bureau of Statistics revised the unemployment rate up to 6.2% from 6.1%. The reaction was short-lived thanks to much better than expected retail sales data. The AUD recovered after the Reserve Bank of Australia offered no surprise in its monthly policy statement.
• The medium-term outlook is bearish. In our opinion no positions on the AUD/USD are justified from the risk/reward perspective at the moment. We’ve taken long position on the AUD/NZD at 1.1220 with the target at 1.1500 and stop-loss at 1.1080.

Significant technical analysis’ levels:

Resistance: 0.8760 (high Nov 3), 0.8850 (high Oct 31), 0.8911 (high Oct 29)

Support: 0.8644 (session low Nov 4), 0.8635 (low Jul 19, 2010), 0.8623 (low Jul 8, 2010)

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