EU Session Bullet Report – USD strength as China devalues its Currency

In a surprise move today the People’s Republic of China, raised its USD/CNY rate by almost 2% while also indicating that greater volatility ahead could be expected. This was the biggest one day drop in its currency ever since China adopted market exchange rates in 1994.

Most major currencies and especially AUD and NZD were hit the hardest as the USD strengthened across the board. This is yet another measure to spur the economic slump that hit the country over the past few months. AUDUSD dropped because Chinese companies purchasing products from Australia or New Zealand have now less purchasing power with a weaker Chinese Currency.

NZDUSD also dropped 100 points to 0.6540 while USDJPY also jumped to 124.89. This move is widely expected to support USD versus Asian currencies.

EUR/CHF is continuing with its up-trend, trading at its highest level since the CHF de-pegged from the EUR in January in a move that can be explained by a reversal of safe-haven flows as Grexit risks have been reduced.

The economic calendar, offers little data yet again today, with the biggest news being the ZEW Economic Sentiment Index to be released at 09:00 GMT.

Trading quote of the day:

“If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time”

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.101
Likely Scenario: Short positions below 1.101 with targets @ 1.0955 & 1.092 in extension.
Alternative scenario: Above 1.101 look for further upside with 1.1045 & 1.108 as targets.
Comment: The RSI is bearish and calls for further downside.

GBPUSD
Pivot: 1.551
Likely Scenario: Long positions above 1.551 with targets @ 1.5605 & 1.5635 in extension.
Alternative scenario: Below 1.551 look for further downside with 1.5455 & 1.542 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

AUDUSD
Pivot: 0.7385
Likely Scenario: Short positions below 0.7385 with targets @ 0.73 & 0.7285 in extension.
Alternative scenario: Above 0.7385 look for further upside with 0.743 & 0.745 as targets.
Comment: The RSI is badly directed.

USDJPY
Pivot: 124.4
Likely Scenario: Long positions above 124.4 with targets @ 125 & 125.2 in extension.
Alternative scenario: Below 124.4 look for further downside with 124.2 & 124.05 as targets.
Comment: The RSI is well directed.

USDCAD
Pivot: 1.31
Likely Scenario: Short positions below 1.31 with targets @ 1.304 & 1.299 in extension.
Alternative scenario: Above 1.31 look for further upside with 1.315 & 1.318 as targets.
Comment: Intraday technical indicators are mixed and call for caution.

USDCHF
Pivot: 0.979
Likely Scenario: Long positions above 0.979 with targets @ 0.989 & 0.994 in extension.
Alternative scenario: Below 0.979 look for further downside with 0.9755 & 0.9715 as targets.
Comment: A support base at 0.979 has formed and has allowed for a temporary stabilisation.

GOLD
Pivot: 1091.65
Likely Scenario: Long positions above 1091.65 with targets @ 1109.75 & 1115.78 in extension.
Alternative scenario: Below 1091.65 look for further downside with 1087.97 & 1083.49 as targets.
Comment: The RSI is mixed.

OIL
Pivot: 43.9
Likely Scenario: Long positions above 43.9 with targets @ 45.4 & 46.55 in extension.
Alternative scenario: Below 43.9 look for further downside with 43.3 & 42.5 as targets.
Comment: The RSI is mixed to bullish.

DAX
Pivot: 10600
Likely Scenario: Long positions above 10600 with targets @ 11800 & 12390 in extension.
Alternative scenario: Below 10600 look for further downside with 10000 & 9245 as targets.
Comment: The RSI is mixed.

Important note: These technical and research reports are provided to easy-forex® as a subscriber of third party providers. They are provided for informative purposes only and in no way can they be considered as a recommendation by easy-forex® to you to engage in any trade. Hence, easy-forex® shall not be held responsible for any outcome of trading decisions, in regards with these reports or similar reports. You hereby acknowledge that using the information entailed in these reports is at your sole responsibility and you will have no claims with regards to these reports against easy-forex®. If you do not agree to this, you are strongly advised not to use these reports.

TIME IS IN GMT(+3)
Report prepared by the easy-forex VIP desk at 09:00 GMT.

The post EU Session Bullet Report – USD strength as China devalues its Currency appeared first on Forex.Info.

Source:: EU Session Bullet Report – USD strength as China devalues its Currency