Ms. USA (AKA US dollar) weakened against the euro and yen early Wednesday after data suggested U.S. economic growth might be slowing in the final quarter of 2014 following a stronger-than-expected 3.9 percent pace set in third quarter. As I mentioned yesterday, this pullback could accelerate the upcoming forecast for the EUR/USD rally.
U.S. jobless claims rose to 313,000 in the week ended Nov. 22 to their highest level since September.
On the other hand, domestic personal spending grew 0.2 percent in October, slightly less than what economists had forecast, while personal income increased 0.2 percent last month, less than the 0.4 percent projected by analysts. Analysts say that this was spurred by shopping sprees ahead of the holidays, as consumers bought more clothing and home goods. Cheaper fuel prices also allowed Americans to spend more on other items, with the average cost of a gallon of regular gasoline reaching $2.81 recently, according to automobile group AAA.
Nonetheless, this marks the U.S. economy’s fastest pace of growth over a span of six months since 2003. That’s a new record high in over a decade! On an annualized basis, the economy grew by 2.4% in the third quarter, comfortably above the 2% year-over-year growth pace since the U.S. emerged out of recession back in 2009.
While Fed head Janet Yellen and her policymaker buddies could continue their super cautious tone and take things slow, but despite the slip this morning, the future seems bright for Ms. USA. Don’t expect much movements on the forex dance floor tomorrow through especially within the major pairs because (and I can say this with confidence) America will be fully closed tomorrow so that traders can celebrate Thanksgiving day with their loved ones, and probably will be showing gratitude to the growing US economy.
A bit of a personal touch, ever since I moved to the US almost 5 years ago, my family introduced me to this wonderful holiday.
Every year my parents made sure to come back to the US for Thanksgiving so that all of us (my brother, sister, their families and myself) could all get together and devour that turkey.
This year unfortunately my parents didn’t make it here for Thanksgiving. However the rest of us are still planning to get together and exchange gratitude.
There are so many things that I’m genuinely grateful for, and of course having you in our audience is one of them. Happy Thanksgiving!
Intraday Forex Technical Levels
GBP/USD 4-hour: Broke above the resistance level.
Invest Diva positioning: Long positions above 1.5731 with targets at 1.58171 and 1.5887 in extension.
Technical reasons why: The pair broke above the upper boundary of the Ichimoku’s cloud right after breaking above the 23% Fibonacci level at 1.5731. The RSI is above the neutrality area.
Alternative Scenario: Below 1.5731 look for further downside towards 1.5656 and 1.5591.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.5656 | 1.5731 | 1.5887 |
| 1.5591 | 1.5817 |
USD/JPY 4-hour: Consolidating.
Invest Diva positioning: Long positions above 117.50 with targets at 118.86 and 119.78 in extension.
Technical reasons why: The pair continues moving sideways above our pivot level at 117.50 above the Ichimoku’s cloud. The RSI is moving flatly at the neutrality area.
Alternative Scenario: Below 117.50 look for further downside towards 116.56 and 115.60.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 116.56 | 117.50 | 119.78 |
| 115.60 | 118.86 |
USD/CHF 4-hour: Teasing the 23% Fibonacci level.
Invest Diva positioning: Short positions below 0.9648 with targets at 0.9592 and 0.9548 in extension.
Technical reasons why: The pair is testing the 23% Fibonacci level while still remaining above Ichimoku’s cloud but after failing to break above the previous top. The RSI moves slightly below the neutrality area.
Alternative Scenario: Above 0.9648 look for further upside towards 0.9737 and 0.9815.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.9592 | 0.9648 | 0.9815 |
| 0.9548 | 0.9737 |
AUD/USD 4-hour: Dropping.
Invest Diva positioning: Short positions below 0.8472 with targets at 0.8318 and 0.8101 in extension.
Technical reasons why: The pair continues dropping after breaking below the previous bottom below the Ichimoku’s cloud. The RSI moves below the neutrality area.
Alternative Scenario: Above 0.8472 look for further upside towards 0.8555 and 0.8635.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 0.8318 | 0.8472 | 0.8635 |
| 0.8101 | 0.8555 |
EUR/JPY 4-hour: Entering the Ichimoku’s cloud.
Invest Diva positioning: Long positions above 146.80 with targets at 148.92 and 150.08 in extension.
Technical reasons why: The pair continues moving sideways as entering the Ichimoku’s cloud. The RSI is moving above the neutrality area.
Alternative Scenario: Below 146.80 look for further downside towards 145.03 and 143.43.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 145.03 | 146.80 | 150.08 |
| 143.43 | 148.92 |
USD/CAD 4-hour: Testing 61% Fibonacci level.
Invest Diva positioning: Short positions below 1.1226 with targets at 1.1171 and 1.1080 in extension.
Technical reasons why: The pair is now testing 61% Fibonacci level at 1.1226 below the Ichimoku’s cloud. The RSI is heading down to the oversold zone.
Alternative Scenario: Above 1.1226 look for further upside towards 1.1272 and 1.1317.
Where I’m setting my stops and limits:
| Support Levels | Turning Point | Resistance Levels |
|---|---|---|
| 1.1171 | 1.1226 | 1.1317 |
| 1.1080 | 1.1272 |
