EU Session Bullet Report – USD retreats after ISM data

US dollar is on the backbeat today, continuing from yesterday’s mild selloff as US manufacturing data raised questions about how aggressive the FED would be when hiking interest rates. US ISM contracted to the weakest level since 2009, and it could prevent the FED from actively hiking rates (later on) as it showed that monetary tightening could negatively affect the US economy through a stronger USD. Investors focus now turns to the ECB tomorrow and NFP on Friday, as NFP is a factor that could determine what kind of a rate hike path we will have in 2016.

AUDUSD, already bullish from yesterday, reached highs of 0.7354 after the RBA skipped the chance to cut rates on Tuesday. Overall USD index, retreated from the 8.5 month high at 100.31 on Monday and stood at 99.938 after the ISM figures. As a result GOLD and other commodities found a chance to rebound, albeit softly, reaching 1074.50 highs.
Data wise we have UK construction PMI, then US ADP employment report, Canadian interest rate decision and the Fed’s beige book.

Trading quote of the day:

“No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation.”

– Robert Rhea

Green lines are resistance, Red lines are support.

EUR/USD
Pivot: 1.059
Likely scenario: Long positions above 1.059 with targets @ 1.064 & 1.068 in extension.
Alternative scenario: Below 1.059 look for further downside with 1.0555 & 1.052 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

GBP/USD
Pivot: 1.5045
Likely scenario: Long positions above 1.5045 with targets @ 1.5095 & 1.5125 in extension.
Alternative scenario: Below 1.5045 look for further downside with 1.501 & 1.499 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

AUD/USD
Pivot: 0.7295
Likely scenario: Long positions above 0.7295 with targets @ 0.7345 & 0.7365 in extension.
Alternative scenario: Below 0.7295 look for further downside with 0.7275 & 0.725 as targets.
Comment: The RSI lacks downward momentum.

USD/JPY
Pivot: 122.75
Likely scenario: Long positions above 122.75 with targets @ 123.2 & 123.35 in extension.
Alternative scenario: Below 122.75 look for further downside with 122.5 & 122.25 as targets.
Comment: The RSI is well directed.

USD/CAD
Pivot: 1.335
Likely scenario: Long positions above 1.335 with targets @ 1.3395 & 1.341 in extension.
Alternative scenario: Below 1.335 look for further downside with 1.3335 & 1.331 as targets.
Comment: The RSI is well directed.

USD/CHF
Pivot: 1.025
Likely scenario: Long positions above 1.025 with targets @ 1.03 & 1.033 in extension.
Alternative scenario: Below 1.025 look for further downside with 1.022 & 1.0195 as targets.
Comment: A support base at 1.025 has formed and has allowed for a temporary stabilisation.

GOLD
Pivot: 1063.5
Likely scenario: Long positions above 1063.5 with targets @ 1074.7 & 1080 in extension.
Alternative scenario: Below 1063.5 look for further downside with 1058 & 1052.5 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

OIL
Pivot: 42.24
Likely scenario: Short positions below 42.24 with targets @ 41.08 & 40.8 in extension.
Alternative scenario: Above 42.24 look for further upside with 42.6 & 42.97 as targets.
Comment: As long as 42.24 is resistance, likely decline to 41.08.

DAX
Pivot: 11250
Likely scenario: Long positions above 11250 with targets @ 11480 & 11560 in extension.
Alternative scenario: Below 11250 look for further downside with 11150 & 11025 as targets.
Comment: The immediate trend remains up and the momentum is strong.

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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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