EU Session Bullet Report | Asian stocks tumble, safe assets Rise as oil retreats

Oil is once again ongoing a severe drop in value with the prices now under $30 after rebounding to 34.70 last week. As a result, US stocks underwent through a sharp selloff with DOW dropping -1.8% and SP500 -1.87%. The drop was led by energy stocks along with Financials. The risk aversion, is benefiting JPY which pushed the dollar down to 119.40. USDJPY was trading over 121.60 last week.

Overnight ion Asia, the drop was carried over with Japanese Nikkei leading the drop and trades at -3.2% on the day. Chinese stocks are also under pressure (surprise surprise). The only beneficiary of this situation is GOLD which prices are nearing a very important resistance at 1130. A break of this level could signify a temporary bottom and a trend formation cannot be excluded.

Oil prices have fallen about 70% in the past 18 months, largely due to a growing supply but also worsened by slowing economic growth in China and other emerging markets. Uncertainty around global growth has prompted investors to cut back their expectation of future U.S. rate hikes, with Federal funds rate futures now pricing in only about a 50 percent chance of just one rate hike this year compared to 4 hikes priced in earlier in December.

Investors will shift their eyes to EU and UK PMI data but the big news are just before the US session with ADP employment at 13:15 GMT and Markit services PMI at 14:45 GMT. ISM non-manufacturing PMI will be released at 15:00 GMT. EIA will release weekly crude inventory report at 15:30 GMT.

EUR/USD Intraday: under pressure.

Pivot: 1.094

Most likely scenario: short positions below 1.094 with targets @ 1.089 & 1.0875 in extension.

Alternative scenario: above 1.094 look for further upside with 1.0965 & 1.0995 as targets.

Comment: the RSI is capped by a declining trend line.

Gold spot Intraday: the bias remains bullish.

Pivot: 1122

Most likely scenario: long positions above 1122 with targets @ 1133 & 1138.5 in extension.

Alternative scenario: below 1122 look for further downside with 1118 & 1111 as targets.

Comment: the RSI is mixed to bullish.

Crude Oil (WTI) (H6) Intraday: the downside prevails.

Pivot: 31.27

Most likely scenario: short positions below 31.27 with targets @ 29.26 & 28.5 in extension.

Alternative scenario: above 31.27 look for further upside with 32.07 & 33.35 as targets.

Comment: as long as 31.27 is resistance, look for choppy price action with a bearish bias.

GBP/USD Intraday: key resistance at 1.448.

Pivot: 1.448

Most likely scenario: short positions below 1.448 with targets @ 1.4325 & 1.4245 in extension.

Alternative scenario: above 1.448 look for further upside with 1.4535 & 1.459 as targets.

Comment: the upward potential is likely to be limited by the resistance at 1.448. The ascending channel upper boundary maintains a bearish bias.

USD/JPY Intraday: the downside prevails.

Pivot: 120.35

Most likely scenario: short positions below 120.35 with targets @ 119 & 118.5 in extension.

Alternative scenario: above 120.35 look for further upside with 120.9 & 121.4 as targets.

Comment: the RSI is mixed with a bearish bias.

AUD/USD Intraday: the downside prevails.

Pivot: 0.705

Most likely scenario: short positions below 0.705 with targets @ 0.699 & 0.6965 in extension.

Alternative scenario: above 0.705 look for further upside with 0.708 & 0.712 as targets.

Comment: the immediate trend remains down and the momentum is strong.

Dax (Eurex) (H6) Intraday: key resistance at 9670.

Pivot: 9670

Most likely scenario: short positions below 9670 with targets @ 9330 & 9250 in extension.

Alternative scenario: above 9670 look for further upside with 9795 & 9920 as targets.

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

USD/CHF Intraday: under pressure.

Pivot: 1.0205

Most likely scenario: short positions below 1.0205 with targets @ 1.0155 & 1.012 in extension.

Alternative scenario: above 1.0205 look for further upside with 1.0225 & 1.0255 as targets.

Comment: as long as 1.0205 is resistance, likely decline to 1.0155.

USD/CAD Intraday: the upside prevails.

Pivot: 1.402

Most likely scenario: long positions above 1.402 with targets @ 1.412 & 1.4155 in extension.

Alternative scenario: below 1.402 look for further downside with 1.398 & 1.3945 as targets.

Comment: technically the RSI is above its neutrality area at 50. The pair has broken above the upper boundary of a bearish channel.

EUR/JPY Intraday: the downside prevails.

Pivot: 131.3

Most likely scenario: short positions below 131.3 with targets @ 130.2 & 129.6 in extension.

Alternative scenario: above 131.3 look for further upside with 132 & 132.3 as targets.

Comment: the RSI has broken down its 30 level.

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