EU Session Bullet Report | Oil slumps to 12 year lows with no end in sight

Investors will be concerned that China’s continued slump has no end in sight. With no data currently to suggest a turnaround, uncertainty remains as markets look for a sign that it has hit bottom. In Asia this morning, stocks have again closed lower.

Oil’s continued slide has also taken a heavy toll on Oil producing nations, with Canada worst hit as the CAD reached its lowest level against the USD in more than 12.5 years.

European stocks have opened flat this morning as investors take stock of the current situation.

News wise, today’s focus will be on the UK as BoE governor Carney is set to speak at 14.15 GMT following on from manufacturing data earlier this morning at 09.30 GMT. With the GBP under pressure of late, traders will be looking for some positive news to potentially trigger a good buy opportunity.

Trading quote of the day: “Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.” – Jesse Livermore, Reminiscences Of A Stock Operator

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.0905

Our preference: short positions below 1.0905 with targets @ 1.0825 & 1.08 in extension.

Alternative scenario: above 1.0905 look for further upside with 1.0945 & 1.097 as targets.

Comment: as long as 1.0905 is resistance, look for choppy price action with a bearish bias.

GBP/USD

Pivot: 1.451

Our preference: long positions above 1.451 with targets @ 1.46 & 1.4645 in extension.

Alternative scenario: below 1.451 look for further downside with 1.445 & 1.44 as targets.

Comment: a support base at 1.451 has formed and has allowed for a temporary stabilisation.

AUD/USD

Pivot: 0.6955

Our preference: long positions above 0.6955 with targets @ 0.704 & 0.7085 in extension.

Alternative scenario: below 0.6955 look for further downside with 0.6925 & 0.69 as targets.

Comment: a support base at 0.6955 has formed and has allowed for a temporary stabilisation.

USD/JPY

Pivot: 117.95

Our preference: short positions below 117.95 with targets @ 117.15 & 116.7 in extension.

Alternative scenario: above 117.95 look for further upside with 118.8 & 119.3 as targets.

Comment: the upward potential is likely to be limited by the resistance at 117.95.

USD/CAD

Pivot: 1.4175

Our preference: long positions above 1.4175 with targets @ 1.4275 & 1.432 in extension.

Alternative scenario: below 1.4175 look for further downside with 1.413 & 1.406 as targets.

Comment: the RSI is well directed.

GOLD

Pivot: 1105

Our preference: short positions below 1105 with targets @ 1091 & 1086 in extension.

Alternative scenario: above 1105 look for further upside with 1114 & 1121 as targets.

Comment: even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

OIL

Pivot: 32.3

Our preference: short positions below 32.3 with targets @ 30 & 29.05 in extension.

Alternative scenario: above 32.3 look for further upside with 33.78 & 35.15 as targets.

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

DAX

Pivot: 10125

Our preference: short positions below 10125 with targets @ 9570 & 9400 in extension.

Alternative scenario: above 10125 look for further upside with 10290 & 10425 as targets.

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

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TIME IS IN GMT(+2)

Report prepared by the easy-forex VIP desk 07:45 GMT.

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