US Session Bullet Report – The GREAT FALL of CHINA

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The global carnage is picking off from where it stopped in the Asian session and it looks like the US stocks will also suffer one of their worst days in history. The open looks like it will be a bloodbath as early indications point to the Dow losing over 600 points at the opening alone. DAX, CAC, FTSE are all down over 4% , and US futures point to losses over 5% for today. As a result of the global slowdown fears OIL is at 2009 levels, and for the first time since then under $40 a barrel. The only currencies performing well in this market are EUR, JPY and CHF. EURUSD surges to above 1.1540 puzzling investors as to its resilience when everything else is losing value against USD. As several analysts have pointed out, investors have borrowed heavily in euros (due to the low interest rates) and used those proceeds for more risky bets in equities such as the Chinese. Therefore the massive crash in global indices has caused a huge unwind in the EUR carry trade pushing the single currency higher. For more information search the term Carry trade.

We have seen the above moves again in 2007, however with the Chinese government being the biggest supporter of the Stock market, this could be far bigger and uglier than 2007 should the selloff continue a little longer.

Trading quote of the Day:

“The Trend is your Friend.”

EURUSD
Pivot: 1.1395
Likely scenario: Long positions above 1.1395 with targets @ 1.1565 & 1.16 in extension.
Alternative scenario: Below 1.1395 look for further downside with 1.1345 & 1.13 as targets.
Comment: The RSI is well directed.

GBPUSD
Pivot: 1.5655
Likely scenario: Long positions above 1.5655 with targets @ 1.577 & 1.5805 in extension.
Alternative scenario: Below 1.5655 look for further downside with 1.5625 & 1.56 as targets.
Comment: The RSI is well directed.

 

AUDUSD
Pivot: 0.728
Likely scenario: Short positions below 0.728 with targets @ 0.72 & 0.7175 in extension.
Alternative scenario: Above 0.728 look for further upside with 0.732 & 0.736 as targets.
Comment: The RSI is mixed to bearish.

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USDJPY
Pivot: 121.3
Likely scenario: Short positions below 121.3 with targets @ 119.3 & 118.8 in extension.
Alternative scenario: Above 121.3 look for further upside with 122.35 & 123.1 as targets.
Comment: The RSI is badly directed.

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USDCAD
Pivot: 1.3175
Likely scenario: Long positions above 1.3175 with targets @ 1.328 & 1.332 in extension.
Alternative scenario: Below 1.3175 look for further downside with 1.3125 & 1.3055 as targets.
Comment: The RSI is mixed to bullish.

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USDCHF
Pivot: 0.9505
Likely scenario: Short positions below 0.9505 with targets @ 0.93 & 0.9245 in extension.
Alternative scenario: Above 0.9505 look for further upside with 0.955 & 0.96 as targets.
Comment: The RSI is badly directed.

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GOLD
Pivot: 1149
Likely scenario: Long positions above 1149 with targets @ 1165 & 1168 in extension.
Alternative scenario: Below 1149 look for further downside with 1142 & 1137 as targets.
Comment: A support base at 1149 has formed and has allowed for a temporary stabilisation.

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OIL
Pivot: 40
Likely scenario: Short positions below 40 with targets @ 38.7 & 38.2 in extension.
Alternative scenario: Above 40 look for further upside with 40.6 & 41.25 as targets.
Comment: As long as the resistance at 40 is not surpassed, the risk of the break below 38.7 remains high.

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DAX
Pivot: 10050
Likely scenario: Short positions below 10050 with targets @ 9500 & 9250 in extension.
Alternative scenario: Above 10050 look for further upside with 10440 & 10650 as targets.
Comment: The RSI is bearish and calls for further downside.

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TIME IS IN GMT(+3)

Report prepared by the easy-forex VIP desk at 12:45 GMT.

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