EU Session Bullet Report – GOLD collapses, USD strikes back

Overall USD strength is noticeable this morning especially against commodity currencies (AUD, CAD). Speculation that the FED will start hiking rates sooner than expected was the trigger for the USD demand, however the massive drop in GOLD (it fell over $60 in a few minutes) was also a catalyst for USD surge. Reason for the massive gold drop, which now hit a 5 year low and broke significant support of $1130 and $1100 is the fact that China Reported much lower reserves in Gold than expected. China is not expected to report its holdings in GOLD to the IMF like the rest of the developed countries do, so speculation was that it actually has much more reserves than what the report showed.

Another reason for the GOLD drop is also the fact that fear of a Grexit has now diminished so the status of Gold as a safe haven also subsided.

In Eurozone, Greece is expected to reopen banks today after being 3 weeks closed. This period is expected to have cost the Struggling economy over 3 billion Euros in lost revenue. EURUSD has dropped 3 days in a row and closed the week a few pips above May’s low of 1.0828.

The economic calendar is very light this week and mostly focused around Central Bank meetings from UK, Australia and NZ. Volatility should be more prevalent in GOLD, EUR, GBP and commodity currencies.

Trading Quote of the day:

“Keep Calm and Go for GOLD”

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.091
Likely scenario: Short positions below 1.091 with targets @ 1.081 & 1.0735 in extension.
Alternative scenario: Above 1.091 look for further upside with 1.0985 & 1.1035 as targets.
Comment: A break below 1.081 would trigger a drop towards 1.0735.

GBPUSD
Pivot: 1.564
Likely scenario: Short positions below 1.564 with targets @ 1.5555 & 1.5495 in extension.
Alternative scenario: Above 1.564 look for further upside with 1.5675 & 1.573 as targets.
Comment: The RSI is bearish and calls for further downside.

AUDUSD
Pivot: 0.7385
Likely scenario: Short positions below 0.7385 with targets @ 0.73 & 0.7275 in extension.
Alternative scenario: Above 0.7385 look for further upside with 0.7405 & 0.7435 as targets.
Comment: The RSI is capped by a declining trend line.

USDJPY
Pivot: 123.9
Likely scenario: Long positions above 123.9 with targets @ 124.35 & 124.6 in extension.
Alternative scenario: Below 123.9 look for further downside with 123.7 & 123.35 as targets.
Comment: The RSI is supported by a rising trend line.

USDCAD
Pivot: 1.2945
Likely scenario: Long positions above 1.2945 with targets @ 1.301 & 1.3045 in extension.
Alternative scenario: Below 1.2945 look for further downside with 1.29 & 1.281 as targets.
Comment: The RSI is mixed to bullish.

USDCHF
Pivot: 0.955
Likely scenario: Long positions above 0.955 with targets @ 0.9635 & 0.967 in extension.
Alternative scenario: Below 0.955 look for further downside with 0.9505 & 0.9475 as targets.
Comment: The RSI is bullish and calls for further advance.

GOLD
Pivot: 1130
Likely scenario: Short positions below 1130 with targets @ 1087 & 1080 in extension.
Alternative scenario: Above 1130 look for further upside with 1139 & 1146 as targets.
Comment: As long as 1130 is resistance, likely decline to 1087.

OIL
Pivot: 51.25
Likely scenario: Short positions below 51.25 with targets @ 50 & 49.3 in extension.
Alternative scenario: Above 51.25 look for further upside with 52.2 & 52.85 as targets.
Comment: As long as 51.25 is resistance, likely decline to 50.

DAX
Pivot: 11475
Likely scenario: Long positions above 11475 with targets @ 11800 & 11900 in extension.
Alternative scenario: Below 11475 look for further downside with 11250 & 11150 as targets.
Comment: The RSI is mixed to bullish.

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Report prepared by the easy-forex VIP desk at 06:30 GMT.

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