EU Session Bullet Report – After ECB Fireworks, NFP next

When we prepared the Bullet Report yesterday at the same time, we mentioned that if ECB President Disappoints during the press conference, that a gradual recovery towards 1.0880 cannot be excluded. Little did we know that the recovery wouldn’t be gradual and would not stop until 100 pips above 1.0880.

Yesterday’s trading range on the EURUSD was 462 pips in one day. The last time that the EUR traded even close to this was on March 18, 2015 when it traded in a 456 pip range after the FOMC meeting where the FED hinted on raising rates for the first time. This time, it was the ECB that sparked the fireworks as it only cut by 0.1% when most participants expected a 0.2% rate cut and an increase in the amount of stimulus, which didn’t happen. We noticed yesterday that more and more traders were trying to catch the top, by selling and selling the EUR when it was rising. You should never fight a central Bank. Even if the move seems huge at 200 pips, it may turn to 400 pips a few minutes later. Decisions of a CB like yesterday, also don’t last only one day. When Bank of Japan announced an increase in the QE in Oct 2014, the first day USD/JPY rallied 314 pips while everyone thought they missed the trade. In the next 35 days, it rose by another 1000.

So what’s next after a show like yesterday? Where is the USD heading? Luckily we have also the NFP today and it will be a critical piece of data to close the case for the Fed’s rate hike on December 16. Markets are expecting 198k growth in the US job market in November while unemployment rate is expected to be unchanged at 5.0%.

Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.083
Likely scenario: Long positions above 1.083 with targets @ 1.099 & 1.109 in extension.
Alternative scenario: Below 1.083 look for further downside with 1.076 & 1.069 as targets.
Comment: Technically the RSI is above its neutrality area at 50.

GBP/USD
Pivot: 1.505
Likely scenario: Long positions above 1.505 with targets @ 1.519 & 1.523 in extension.
Alternative scenario: Below 1.505 look for further downside with 1.5 & 1.4955 as targets.
Comment: The RSI is bullish and calls for further upside.

AUD/USD
Pivot: 0.7305
Likely scenario: Long positions above 0.7305 with targets @ 0.7365 & 0.738 in extension.
Alternative scenario: Below 0.7305 look for further downside with 0.7285 & 0.725 as targets.
Comment: The RSI is mixed and calls for caution.

USD/JPY
Pivot: 122.85
Likely scenario: Short positions below 122.85 with targets @ 122.25 & 122 in extension.
Alternative scenario: Above 122.85 look for further upside with 123.1 & 123.55 as targets.
Comment: As long as the resistance at 122.85 is not surpassed, the risk of the break below 122.25 remains high.

USD/CAD
Pivot: 1.331
Likely scenario: Long positions above 1.331 with targets @ 1.337 & 1.34 in extension.
Alternative scenario: Below 1.331 look for further downside with 1.328 & 1.324 as targets.
Comment: The RSI is mixed with a bullish bias.

USD/CHF
Pivot: 1.0035
Likely scenario: Short positions below 1.0035 with targets @ 0.983 & 0.975 in extension.
Alternative scenario: Above 1.0035 look for further upside with 1.0115 & 1.0175 as targets.
Comment: The break below 1.0035 is a negative signal that has opened a path to 0.983.

GOLD
Pivot: 1058
Likely scenario: Long positions above 1058 with targets @ 1066.5 & 1069 in extension.
Alternative scenario: Below 1058 look for further downside with 1055 & 1051.5 as targets.
Comment: The RSI is mixed to bullish.

OIL
Pivot: 40.08
Likely scenario: Long positions above 40.08 with targets @ 41.8 & 42.24 in extension.
Alternative scenario: Below 40.08 look for further downside with 39.6 & 39.16 as targets.
Comment: A support base at 40.08 has formed and has allowed for a temporary stabilisation.

DAX
Pivot: 10605
Likely scenario: Long positions above 10605 with targets @ 10860 & 10940 in extension.
Alternative scenario: Below 10605 look for further downside with 10470 & 10260 as targets.
Comment: The RSI calls for a rebound.

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TIME IS IN GMT(+2)

Report prepared by the easy-forex VIP desk at 06:20 GMT.

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