EU Session Bullet Report – Slow start to a busy week

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Over the past week, there were lots of important developments which the market has not fully digested yet. ECB delivered a rate cut, however the market was unimpressed as to the effectiveness of only this measure. As a result the EUR had its strongest day in 6 years after it advanced 462 pips in one day. Global stocks nosedived following the event with Dow dropping 252 points. On Friday, the NFP jobs report was released at 211k versus 200k expected, sealing the deal for a December rate hike for the first time in 10 years. USD was the weakest currency of the week along with the JPY. Some Trading Desks in Banks had to revise their forecast for EURUSD as now the market has shifted into a neutral direction.

As for data this session, it is a slow Monday with German industrial production to start the day followed by BoE governor Carney speaking at 15:00 GMT in Brussels. This week however, features 3 other central banks in the list of market watchers. Those include RBNZ, SNB and BoE, all on Thursday. Other focuses will include China trade balance, CPI and PPI; UK industrial and manufacturing productions, as well as Australian employment.

Green lines are resistance, Red lines are support.

EUR/USD
Pivot: 1.083
Likely scenario: long positions above 1.083 with targets @ 1.09 & 1.098 in extension.
Alternative scenario: below 1.083 look for further downside with 1.076 & 1.069 as targets.
Comment: a support base at 1.083 has formed and has allowed for a temporary stabilisation.

GBP/USD
Pivot: 1.5075
Likely scenario: long positions above 1.5075 with targets @ 1.516 & 1.519 in extension.
Alternative scenario: below 1.5075 look for further downside with 1.505 & 1.5 as targets.
Comment: a support base at 1.5075 has formed and has allowed for a temporary stabilisation.

 

AUD/USD
Pivot: 0.7305
Likely scenario: long positions above 0.7305 with targets @ 0.7385 & 0.741 in extension.
Alternative scenario: below 0.7305 look for further downside with 0.7285 & 0.725 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

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USD/JPY
Pivot: 122.9
Likely scenario: long positions above 122.9 with targets @ 123.35 & 123.55 in extension.
Alternative scenario: below 122.9 look for further downside with 122.7 & 122.45 as targets.
Comment: the RSI is well directed.

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USD/CAD
Pivot: 1.331
Likely scenario: long positions above 1.331 with targets @ 1.343 & 1.346 in extension.
Alternative scenario: below 1.331 look for further downside with 1.328 & 1.324 as targets.
Comment: the RSI is mixed to bullish.

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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: the upward potential is likely to be limited by the resistance at 1.0035.

6

GOLD
Pivot: 1075
Likely scenario: long positions above 1075 with targets @ 1091 & 1100 in extension.
Alternative scenario: below 1075 look for further downside with 1069.5 & 1064 as targets.
Comment: the RSI is supported by a rising trend line.

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OIL
Pivot: 41.1
Likely scenario: short positions below 41.1 with targets @ 39.16 & 38.52 in extension.
Alternative scenario: above 41.1 look for further upside with 41.8 & 42.2 as targets.
Comment: as long as 41.1 is resistance, likely decline to 39.16.

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DAX
Pivot: 10630
Likley 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 is bullish and calls for further advance.

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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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