USD/JPY: Buy At 117.50 After Short-Term Correction

GROWTHACES.COM Trading Positions

EUR/USD: short at 1.2550, target 1.2400, stop-loss 1.2490

USD/CHF: long at 0.9560, target 0.9760, stop-loss 0.9630

USD/CAD: long at 1.1260, target 1.1400, stop-loss 1.1220

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

EUR/USD: Close To The Target After Draghi’s Speech

(stay short, the target is 1.2400)

• European Central Bank President Mario Draghi said there was now no sign of economic improvement in the months ahead. He added: “If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases.” Draghi said further measures could involve large-scale purchases of government bonds, also known as quantitative easing.

• The EUR/USD fell significantly after Draghi’s speech and is close to the target of our short EUR/USD position of 1.2400.

• Let’s take a look at the economic calendar for the next week. We have German Ifo index scheduled for Monday. Ifo index has two components: the assessment of current situation the sub-index of expectations. A slight decline in the assessment of current situation could be expected, especially given strongly disappointing German PMI release. We believe that a lot of pessimism has been already been priced in the expectations component of Ifo index. A weaker EUR and lower input prices are likely to improve slightly the expectations component.

• Another important release next week is Euro zone flash November CPI reading on Friday. It is likely to remain unchanged at 0.4% yoy. Continuation of decline in price of oil products generates a downside risk to the forecast. Core inflation is likely to stay at 0.7% yoy, unchanged from the previous month.
  
  
  

Significant technical analysis' levels:

Resistance: 1.2569 (high Nov 21), 1.2589 (30-dma), 1.2601 (high Nov 19)

Support: 1.2398 (low Nov 14), 1.2358 (low Nov 7), 1.2342 (low Aug 21, 2013)

USD/JPY: Buy At 117.50 After Short-Term Correction

(we raised our bid to 117.50)

• Prime Minister Shinzo Abe dissolved parliament's lower house on Friday for a snap election on December 14. An Asahi newspaper poll published on Friday showed 37% said they would vote for Abe’s Liberal Democratic Party in proportional representation districts, compared with 13% who planned to vote for the main opposition Democratic Party of Japan. 30% were undecided.

• Economics minister Akira Amari said on Friday that the government is aiming to bring Japan's primary budget into a surplus in the fiscal year to March 2021 without raising the sales tax beyond 10%. Prime Minister Shinzo Abe's decision to delay a sales tax hike to 10% until April 2017.

• Japanese Finance Minister Taro Aso said the JPY's fall over the past week was too rapid. However, he dismissed the need to intervene to halt the move. He added currency moves, whether up or down, were undesirable.

• Comments from Aso triggered profit-taking on JPY-selling positions. The USD/JPY fell to 117.36 from 118.00 before his comments. Our bid order was placed at 117.30, so it was not filled. The USD/JPY rose above 118.00 in the morning European session, but the increase was short-lived. A rebound in the JPY was in line with our expectations, but in our opinion it is a short-term correction. We are looking to get long again on the USD/JPY and raised our bid to 117.50.

• Monday is a public holiday in Japan.
  
  
  

Significant technical analysis' levels:

Resistance: 118.37 (session high Nov 21), 118.98 (high Nov 20), 119.00 (psychological level)

Support: 117.36 (session low Nov 21), 117.00 (psychological level), 116.81 (low Nov 19)

USD/CAD: Long At 1.1260. Eyes On Inflation Data

(we got long, the target is 1.1400)

• Statistics Canada showed the value of Canadian wholesale sales in September jumped unexpectedly by 1.8% mom, much higher than the median forecast of 0.8% mom. The rise was the greatest since the 2.4% gain recorded in May 2014. The robust figures will likely push September GDP growth up by about 0.3%, though the final figures won't be confirmed until next-week retail sales data.

• The CAD was outperforming nearly all other major currencies yesterday and the USD/CAD closed slightly above 1.1300. The CAD was boosted also by higher oil prices.

• The release of Canadian October CPI and core inflation data is scheduled for today. CPI is expected to rise to 2.1% yoy from 2.0% yoy in the previous month. Core inflation is forecast to stay unchanged vs. the previous reading, at 2.1% yoy.

• We got long on the USD/CAD at 1.1260. The target is 1.1400.
  

  

Significant technical analysis' levels:

Resistance: 1.1369 (high Nov 20), 1.1394 (high Nov 14), 1.1402 (high Nov 11)

Support: 1.1260 (low Nov 18), 1.1253 (61.8% 1.1122-1.1466), 1.1181 (low Oct 31)