EU Session Bullet Report | Asia stocks hit 4-year low as oil falls even lower

Not a good day for stock markets in Asia and the selloff there has taken OIL down and USDJPY with it. Nikkei is trading down almost 4% as a relentless slide in OIL prices diminished an attempt from Wall Street to rebound earlier in the day. US Crude OIL had a brief recovery yesterday but sellers quickly jumped in and pushed it down to a new 12 year low of $27.92. As a result, currencies of OIL exporting Nations such as CAD are sold off. USDCAD has reached 1.4660 – a multiyear high. NZDUSD was sold off after weak Quarter 4 GDP reading – it dropped 75 pips and never recovered since. USDJPY nosedived, it is trading at 116.62 at the moment, from 118.11 yesterday. Gold is trading up a few dollars but relatively stable, while the biggest losers of the session were AUDJPY and GBPJPY which shed over 150 pips each.

Going into the European and American sessions, we start with ECB’s Nowotny speaking and later turn to UK unemployment. After that US CPI will take center stage, but it is the Bank of Canada Rate Decision that stands out, with the Bank expected to cut rates due to the recession the country is facing from lower oil prices.

Trading quote of the day: You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets. Peter Lynch

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Technical Analysis

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.09

Likely scenario: long positions above 1.09 with targets @ 1.0965 & 1.0985 in extension.

Alternative scenario: below 1.09 look for further downside with 1.0855 & 1.0835 as targets.

Comment: the RSI is bullish and calls for further upside.

GBP/USD

Pivot: 1.423

Likely scenario: short positions below 1.423 with targets @ 1.4125 & 1.408 in extension.

Alternative scenario: above 1.423 look for further upside with 1.427 & 1.432 as targets.

Comment: a break below 1.4125 would trigger a drop towards 1.408.

AUD/USD

Pivot: 0.69

Likely scenario: short positions below 0.69 with targets @ 0.6825 & 0.68 in extension.

Alternative scenario: above 0.69 look for further upside with 0.693 & 0.6955 as targets.

Comment: the RSI is badly directed.

USD/JPY

Pivot: 117.65

Likely scenario: short positions below 117.65 with targets @ 116.5 & 116.25 in extension.

Alternative scenario: above 117.65 look for further upside with 118.1 & 118.35 as targets.

Comment: the RSI has broken down its 30 level.

USD/CAD

Pivot: 1.4505

Likely scenario: long positions above 1.4505 with targets @ 1.469 & 1.4755 in extension.

Alternative scenario: below 1.4505 look for further downside with 1.442 & 1.433 as targets.

Comment: the RSI is bullish and calls for further advance.

GOLD

Pivot: 1085

Likely scenario: long positions above 1085 with targets @ 1097 & 1106 in extension.

Alternative scenario: below 1085 look for further downside with 1080 & 1076 as targets.

Comment: the RSI is supported by a rising trend line.

OIL

Pivot: 29.4

Likely scenario: short positions below 29.4 with targets @ 27 & 26.2 in extension.

Alternative scenario: above 29.4 look for further upside with 30.2 & 30.96 as targets.

Comment: the RSI is bearish and calls for further decline.

DAX

Pivot: 9630

Likely scenario: short positions below 9630 with targets @ 9255 & 9150 in extension.

Alternative scenario: above 9630 look for further upside with 9760 & 9945 as targets.

Comment: the RSI advocates for further downside.

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TIME IS IN GMT(+2)

Report prepared by the easy-forex VIP desk 07:20 GMT.

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