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EU Session Bullet Report – Recession or Correction
US stocks again closed down on Tuesday as further panic selling gripped investors following poor manufacturing data from the US. The DOW plunged 470 points, the third biggest drop of the year.
In Asia this morning, slightly worse than expected GDP data from Australia (0.2% versus 0.4% expected) did not have the impact expected as major indices in the region are trading higher for the day.
Despite global concerns over growth, it could it be that stock indices are undergoing only a major correction. Interest rates in the US will inevitably rise sooner or later so perhaps investors are locking in profits therefore maximizing the cheap lending rate at this time.
In FX, we saw a slightly stronger USD against other majors although prices remain in a tight range.
Oil fell just as fast at it rose on Monday falling almost 8% and is currently trading below its intraday pivot of $47. RSI on the technical lacks upward momentum so we could see oil testing its support of $41,75 at some stage. Watch out for Oil inventories today at 14:30GMT.
Gold remains pretty static after an exciting past week or so. Currently trading just below 1140, the shiny metal seems to have been pushed to the side at least tempoarily as a safe haven.
Today we have a relatively quiet calendar news wise in the Eurozone. Construction PMI from the UK at 08:30GMT is the major highlight to watch out for. Later today from the US, we have Durable goods at 14:00GMT although ADP employment change at 12:30GMT will be the one to watch as could serve as a barometer for the big one on Friday, the NFP.
Trading quote of the day:
“A great trader is like a great athlete . You have to have natural skills, but you have to train yourself how to use them.”
– Marty Schwartz, Pit Bull
EURUSD
Pivot: 1.123
Likely scenario: Long positions above 1.123 with targets @ 1.135 & 1.14 in extension.
Alternative scenario: Below 1.123 look for further downside with 1.12 & 1.1155 as targets.
Comment: The pair has broken above a declining trend line and remains on the upside.
GBPUSD
Pivot: 1.538
Likely scenario: Short positions below 1.538 with targets @ 1.5265 & 1.521 in extension.
Alternative scenario: Above 1.538 look for further upside with 1.5445 & 1.55 as targets.
Comment: As long as 1.538 is resistance, likely decline to 1.5265.
AUDUSD
Pivot: 0.7085
Likely scenario: Short positions below 0.7085 with targets @ 0.7 & 0.695 in extension.
Alternative scenario: Above 0.7085 look for further upside with 0.712 & 0.716 as targets.
Comment: A break below 0.7 would trigger a drop towards 0.695.
USDJPY
Pivot: 119.2
Likely scenario: Long positions above 119.2 with targets @ 120.65 & 121.05 in extension.
Alternative scenario: Below 119.2 look for further downside with 118.85 & 118.35 as targets.
Comment: The RSI is well directed.
USDCAD
Pivot: 1.3155
Likely scenario: Long positions above 1.3155 with targets @ 1.3275 & 1.3325 in extension.
Alternative scenario: Below 1.3155 look for further downside with 1.311 & 1.3055 as targets.
Comment: Technically the RSI is above its neutrality area at 50.
USDCHF
Pivot: 0.964
Likely scenario: Short positions below 0.964 with targets @ 0.955 & 0.9505 in extension.
Alternative scenario: Above 0.964 look for further upside with 0.969 & 0.973 as targets.
Comment: As long as 0.964 is resistance, look for choppy price action with a bearish bias.
Gold
Pivot: 1134
Likely scenario: Long positions above 1134 with targets @ 1148 & 1153 in extension.
Alternative scenario: Below 1134 look for further downside with 1125 & 1117 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
OIL
Pivot: 47
Likely scenario: Short positions below 47 with targets @ 41.75 & 40.55 in extension.
Alternative scenario: Above 47 look for further upside with 49.4 & 52 as targets.
Comment: The RSI lacks upward momentum.
DAX
Pivot: 10440
Likely scenario: Short positions below 10440 with targets @ 9780 & 9645 in extension.
Alternative scenario: Above 10440 look for further upside with 10650 & 10735 as targets.
Comment: As long as 10440 is resistance, look for choppy price action with a bearish bias.
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TIME IS IN GMT(+3)
Report prepared by the easy-forex VIP desk at 06:20 GMT.
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