EU Session Bullet Report – Growth concerns fuel volatility

US markets closed down on Wednesday following the FOMC minutes which led to choppy trading on Wall Street with markets now questioning the likelihood of a rate hike next month. Despie the improving US job market, the minutes showed policymakers remain broadly concerned about lagging inflation and the overall global economy.

In Asia this morning, continued concerns over slowing growth in China compunded by the FOMC minutes sent Asian shares tumbling reaching new monthly lows.

Amid the uncertainty, Gold benefited most posting its biggest daily gain in two months and is now trading above 1138, a new monthly high with next resistance at 1143. Oil continues its freefall as inventories showed significantly greater reserves than forecast leading to a fresh 6 and a half year low and is now trading below $41 per barrel. Should it break $40 then we could expect to see further downside.
Today in Europe, Greece is expected to meet its next bond repayment to the ECB and in the UK we have Retail sales data due for release at 08:30GMT. Later today in the US we have Unemployment claims at 12:30 GMT, Home Sales and Fed Manufacturing Index at 14:00 GMT.
With so much going on in the markets at the moment with no clear direction expect the unexpected as we will no doubt see volatility.

Trading quote of the day:

“There is only one side of the market and it is not the bull side or the bear side, but the right side.” – Jesse Livermore

EURUSD
Pivot: 1.107
Likely scenario: Long positions above 1.107 with targets @ 1.1165 & 1.1185 in extension.
Alternative scenario: Below 1.107 look for further downside with 1.1015 & 1.098 as targets.
Comment: The RSI is bullish and calls for further advance.

GBPUSD
Pivot: 1.572
Likely scenario: Short positions below 1.572 with targets @ 1.5615 & 1.5575 in extension.
Alternative scenario: Above 1.572 look for further upside with 1.577 & 1.5805 as targets.
Comment: As long as the resistance at 1.572 is not surpassed, the risk of the break below 1.5615 remains high.

AUDUSD
Pivot: 0.731
Likely scenario: Long positions above 0.731 with targets @ 0.739 & 0.741 in extension.
Alternative scenario: Below 0.731 look for further downside with 0.728 & 0.7255 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

USDJPY
Pivot: 124.15
Likely scenario: Short positions below 124.15 with targets @ 123.65 & 123.45 in extension.
Alternative scenario: Above 124.15 look for further upside with 124.6 & 125 as targets.
Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

USDCAD
Pivot: 1.308
Likely scenario: Long positions above 1.308 with targets @ 1.315 & 1.3185 in extension.
Alternative scenario: Below 1.308 look for further downside with 1.302 & 1.2985 as targets.
Comment: The RSI lacks downward momentum.

USDCHF
Pivot: 0.9745
Likely scenario: Short positions below 0.9745 with targets @ 0.963 & 0.96 in extension.
Alternative scenario: Above 0.9745 look for further upside with 0.98 & 0.985 as targets.
Comment: A break below 0.963 would trigger a drop towards 0.96.

GOLD
Pivot: 1126.8
Likely scenario: Long positions above 1126.8 with targets @ 1143.5 & 1149.5 in extension.
Alternative scenario: Below 1126.8 look for further downside with 1119 & 1109.15 as targets.
Comment: The RSI is well directed.

OIL

Pivot: 41.4
Likely scenario: Short positions below 41.4 with targets @ 40.4 & 40.1 in extension.
Alternative scenario: Above 41.4 look for further upside with 42.14 & 42.67 as targets.
Comment: As long as 41.4 is resistance, likely decline to 40.4.

DAX

Pivot: 10910

Likely scenario: Short positions below 10910 with targets @ 10500 & 10410 in extension.

Alternative scenario: Above 10910 look for further upside with 11090 & 11205 as targets.

Comment: As long as 10910 is resistance, look for choppy price action with a bearish bias.

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

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