EU Session Bullet Report – OIL tumbles to 7 year lows, Commodity currencies hit hard

The oil price continues to slide to 7 year lows as markets fully digest OPEC’s decision on Friday to essentially drop production quota by retaining production at current levels. Noteworthy loser is Brent oil which has shed 9% of its value since the ECB meeting on Thursday. As a result, commodity currencies (CAD, NOK and AUD) where hit hard since then. Overnight, AUDUSD traded weaker despite strong business survey results last month and the JPY held stronger on Tuesday in Asia despite disappointing third quarter growth figures. AUDUSD previously hit a 3.5 month high at 0.7386 before collapsing to 0.7210 levels. Asian Stocks hit 3 week lows as oil prices knocked energy company shares lower. EURUSD is marginally higher today, testing 1.0860 area. Traders minds will remain on central bank activities including RBNZ, SNB and BoE this week. And more importantly, Fed is generally expected to hike interest rate next week.

Trading quote of the day:

“To be a good trader, you need to trade with your eyes open, recognize real trends and turns, and not waste time or energy on regrets and wishful thinking.”

– Alexander Elder

Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.09
Likely scenario: short positions below 1.09 with targets @ 1.076 & 1.069 in extension.
Alternative scenario: above 1.09 look for further upside with 1.098 & 1.109 as targets.
Comment: as long as 1.09 is resistance, likely decline to 1.076.

GBP/USD
Pivot: 1.509
Likely scenario: short positions below 1.509 with targets @ 1.5 & 1.4955 in extension.
Alternative scenario: above 1.509 look for further upside with 1.5115 & 1.5155 as targets.
Comment: the RSI is mixed to bearish.

AUD/USD
Pivot: 0.7285
Likely scenario: short positions below 0.7285 with targets @ 0.719 & 0.7165 in extension.
Alternative scenario: above 0.7285 look for further upside with 0.732 & 0.735 as targets.
Comment: the RSI has broken down its 30 level.

USD/JPY
Pivot: 122.9
Likely scenario: long positions above 122.9 with targets @ 123.55 & 123.75 in extension.
Alternative scenario: below 122.9 look for further downside with 122.7 & 122.45 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

USD/CAD
Pivot: 1.344
Likely scenario: long positions above 1.344 with targets @ 1.355 & 1.3585 in extension.
Alternative scenario: below 1.344 look for further downside with 1.34 & 1.335 as targets.
Comment: the RSI is well directed.

USD/CHF
Pivot: 1.0035
Likely scenario: short positions below 1.0035 with targets @ 0.9945 & 0.987 in extension.
Alternative scenario: above 1.0035 look for further upside with 1.0115 & 1.0175 as targets.
Comment: as long as the resistance at 1.0035 is not surpassed, the risk of the break below 0.9945 remains high.

GOLD
Pivot: 1078
Likely scenario: short positions below 1078 with targets @ 1065.5 & 1058 in extension.
Alternative scenario: above 1078 look for further upside with 1082 & 1088 as targets.
Comment: as long as 1078 is resistance, likely decline to 1065.5.

OIL
Pivot: 39.2
Likely scenario: short positions below 39.2 with targets @ 37 & 36.4 in extension.
Alternative scenario: above 39.2 look for further upside with 39.8 & 40.7 as targets.
Comment: as long as 39.2 is resistance, likely decline to 37.

DAX
Pivot: 10630
Likely scenario: long positions above 10630 with targets @ 11080 & 11200 in extension.
Alternative scenario: below 10630 look for further downside with 10470 & 10260 as targets.
Comment: the RSI lacks downward momentum.

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TIME IS IN GMT(+2)

Report prepared by the easy-forex VIP desk at 06:20 GMT.

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