Growth Aces Research Team
Growth Aces
Do you want to know which are the Current Trading Positions of our contributors? Get a glance here.
GROWTHACES.COM Forex Trading Strategies
Taken Positions:
EUR/USD: long at 1.0705, target 1.0900, stop-loss 1.0610, risk factor **
GBP/USD: long at 1.5265, target 1.5390, stop-loss 1.5180, risk factor **
AUD/USD: long at 0.7170, target 0.7280, stop-loss 0.7090, risk factor *
NZD/USD: long at 0.6520, target 0.6700, stop-loss 0.6445, risk factor **
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EUR/USD: Moderate Reaction To Draghi, Markets Want More!
(long at 1.0705)
European Central Bank Mario Draghi reiterated the bank was ready to act to boost anaemic inflation in the Eurozone, highlighting changes to its asset purchase programme and deposit rate as possible tools.
Draghi defended the ECB's quantitative easing asset purchase programme, saying it had brought down borrowing costs for euro zone companies. He said the scheme could be expanded and extended and its composition changed to provide further stimulus.
The head of the Bundesbank Jens Weidmann said that there was no reason to paint a gloomy economic picture and that existing monetary measures still needed time to work. He added: “The longer we stay in ultra-loose monetary policy mode, the less effective this policy will become and the more the attendant risks and side-effects will come into play.”
Markets are expecting further ECB action on December 3, most likely including a further cut to the deposit rate and an extension of the asset purchases beyond their scheduled end in September 2016.
The EUR/USD reacted moderately to Draghi’s speech, which suggests that further monetary easing in the Eurozone has been already priced in and the market needs more details on the planned action to push the EUR below recent lows (1.0617 on November 18).
We went EUR/USD long at 1.0705 yesterday and do not change our strategy. The sentiment is strongly bearish now but we have no new events that may fuel further drops and this creates a risk of a short squeeze. We expect a stronger recovery in the EUR/USD before the next wave of falls.
Significant technical analysis levels:
Resistance: 1.0739 (10-day ema), 1.0763 (high Nov 19), 1.0778 (high Nov 16)
Support: 1.0617 (low Nov 18), 1.0571 (low Apr 15), 1.0532 (low Apr 14)
Our research is based on information obtained from or are based upon public information sources. We consider them to be reliable but we assume no liability of their completeness and accuracy. All analyses and opinions found in our reports are the independent judgment of their authors at the time of writing. The opinions are for information purposes only and are neither an offer nor a recommendation to purchase or sell securities. By reading our research you fully agree we are not liable for any decisions you make regarding any information provided in our reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise you to contact a certified investment advisor and we encourage you to do your own research before making any investment decision.
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