EUR/USD: Stay Long, Eyes On Draghi Today

GROWTHACES.COM Forex Trading Strategies:

Taken Positions

EUR/USD: long at 1.0670, target 1.1000, stop-loss 1.0730, risk factor *

USD/JPY: short at 121.20, target 119.00, stop-loss 120.70, risk factor ***

AUD/USD: long at 0.7680, target 0.7900, stop-loss 0.7710, risk factor **

EUR/GBP: long at 0.7175, target 0.7375, stop-loss 0.7190, risk factor *

EUR/JPY: long at 129.00, target 132.00, stop-loss 129.00, risk factor **

EUR/CHF: long at 1.0570, target 1.0990, stop-loss 1.0400, risk factor **

Pending Orders

NZD/USD: buy at 0.7490, target 0.7700, stop-loss 0.7380, risk factor **

EUR/CAD: buy at 1.3540, target 1.3750, stop-loss 1.3440, risk factor **

EUR/USD: Eyes On Draghi Today

(stay long for 1.1000)

• In the Euro zone, ECB President Mario Draghi will address a European Parliament committee today 14:30 GMT, with Greece and the progress of the ECB's quantitative easing programme sure to be high on the agenda. With officials in Brussels, Berlin and the ECB now openly acknowledging the risk that Greece could leave the euro zone, a meeting between Alexis Tsipras and Angela Merkel in Berlin on Monday will be closely watched for signs of a breakthrough or hardening of positions.

• The market will focus also on today’s comments from Fed Vice Chair Stanley Fischer (15:00 GMT). Another important event this week is the release of U.S. CPI data (on Tuesday 12:30 GMT).

• Euro zone PMIs (Tuesday, 9:00 GMT) will be important macroeconomic releases this week that could support our long EUR/USD position. They should post the fourth consecutive increase, confirming that the economic recovery is regaining traction. Lower oil prices and weak EUR will continue to stimulate the real economy, especially the manufacturing sector. We expect also stronger increase in German Ifo index (Wednesday, 9:00 GMT), after it rose only 0.1 point in the previous month.

• On Friday markets were still digesting an unexpectedly cautious message from the Federal Reserve. The EUR/USD reached its daily high at 1.0882 on Friday but fell back to 1.0784 early in Asia. We stay EUR/USD long for 1.1000. We have raised our stop-loss to 1.0730.

Significant technical analysis' levels:

Resistance: 1.0882 (high Mar 20), 1.0920 (session high Mar 19), 1.0940 (21-dma)

Support: 1.0754 (hourly low Mar 20), 1.0714 (hourly low Mar 20), 1.0650 (hourly low Mar 20)

USD/CAD: Waiting For Higher Levels To Get Short

(we stay sideways)

• Canada's annual inflation remained unchanged from January at 1.0% in February. Gasoline prices continue to weigh on the CPI, with prices down 21.8% yoy.

• Prices rose in seven of the eight major components. Consumer prices rise were driven most by food prices (3.9% yoy) and shelter costs (1.8% yoy). Annual core inflation rate, which strips out gasoline and other volatile items, was 2.1% yoy, down slightly from 2.2% yoy in the previous month.

• Canadian retail sales in January fell by 1.7% mom vs. forecast fall of 0.7% mom, the second consecutive month of decline as gasoline sales were down 8.8% mom, the biggest monthly drop since November 2008.

• The Bank of Canada, which has an inflation target range of 1% to 3%, expects inflation to be below 1% for much of this year. Weakness in retail increases the risk of Q1 GDP falling below the Bank of Canada's forecast. Markets are pricing in around a 60% chance the bank will hold steady at its policy meeting in April. In our opinion the central bank will not change interest rates in April and probably at the end of this year the main rate will be still at 0.75%. Core inflation, closely watched by the central bank, is pretty close to the middle of the inflation target range.

• We were looking to get short on the USD/CAD but our sell offer was placed too high and was not filled. We stay sideways now, waiting for better levels to get short again. The medium-term outlook for the USD/CAD is mixed. On the one hand we should expect stronger CAD due to diminishing expectations for rate cuts by the BOC, but on the other hand we had a dovish tilt in expectations for Fed hikes last week that may weigh on the USD.

Significant technical analysis' levels:

Resistance: 1.2723 (high Mar 20), 1.2757 (high Mar 19), 1.2800 (psychological level)

Support: 1.2507 (low Mar 19), 1.2477 (low Mar 18), 1.2457 (low Mar 6)