EU Session Bullet Report - Oil dips below $30 as Asia markets rally

Asian markets were at last treated to some new year cheer this morning as Chinese trade data beat expectations, offering a glimpse of light for the global economy. Chinese exports posted 2.3% year-on-year gains to December versus -4.1% expected, although the weakening Yuan will have no doubt contributed to the lagging sector.

Nevertheless, Asian shares enjoyed their first real rally of the year as Japan’s Nikkei jumped 2.8% whilst Australia’s battered ASX was also up more than 1%, continuing its recovery from its recent 5 month low.

In the U.S last night, concerns over the turmoil in China saw oil slip to below $30 for the first time in 12 years however, the positive data from China early this morning has pushed it back up above $30.50 for now at least.

Currencies, and USD remains dominant making strong gains yesterday, in particular against the British Pound. As mentioned yesterday morning, manufacturing data proved pivotal as poor figures sent GBP/USD crashing below 1.4400 for the first time in almost 5.5 years.

With the week starting in better fashion than the last, Gold seems to have lost its shine for now as investors look for alternative asset classes and is now back below 1082.

Watch out for crude oil inventories this afternoon at 15.30 GMT as any significant deviation of the forecast could signal a good buy or sell opportunity. This morning, industrial production from the Eurozone at 10.00 GMT is the only other news of note.

Trading quote of the day: "The ability to foresee that some things cannot be foreseen is a very important quality". – Rousseau

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.086

Likely scenario: short positions below 1.086 with targets @ 1.077 & 1.074 in extension.

Alternative scenario: above 1.086 look for further upside with 1.09 & 1.0945 as targets.

Comment: The pair is trading within a bearish channel.

GBP/USD

Pivot: 1.4475

Likely scenario: short positions below 1.4475 with targets @ 1.44 & 1.435 in extension.

Alternative scenario: above 1.4475 look for further upside with 1.4515 & 1.456 as targets.

Comment: intraday technical indicators are mixed and call for caution.

AUD/USD

Pivot: 0.697

Likely scenario: long positions above 0.697 with targets @ 0.704 & 0.7065 in extension.

Alternative scenario: below 0.697 look for further downside with 0.6935 & 0.6915 as targets.

Comment: the RSI is bullish and calls for further advance.

USD/JPY

Pivot: 117.6

Likely scenario: long positions above 117.6 with targets @ 118.45 & 118.8 in extension.

Alternative scenario: below 117.6 look for further downside with 117.2 & 116.7 as targets.

Comment: the RSI broke above a declining trend line.

USD/CAD

Pivot: 1.4175

Likely scenario: long positions above 1.4175 with targets @ 1.432 & 1.439 in extension.

Alternative scenario: below 1.4175 look for further downside with 1.413 & 1.406 as targets.

Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

GOLD

Pivot: 1095

Likely scenario: short positions below 1095 with targets @ 1082 & 1075 in extension.

Alternative scenario: above 1095 look for further upside with 1099 & 1105.5 as targets.

Comment: the RSI is capped by a bearish trend line.

OIL

Pivot: 32.06

Likely scenario: short positions below 32.06 with targets @ 30 & 29.05 in extension.

Alternative scenario: above 32.06 look for further upside with 33.15 & 34.3 as targets.

Comment: as long as the resistance at 32.06 is not surpassed, the risk of the break below 30 remains high.

DAX

Pivot: 10125

Likely scenario: short positions below 10125 with targets @ 9655 & 9400 in extension.

Alternative scenario: above 10125 look for further upside with 10290 & 10425 as targets.

Comment: the immediate trend remains down and the momentum is strong.