Asian Markets have suffered steep losses over the session, as once again China growth concerns dominated the market. Stock markets dropped 7% and trading halted for the rest of the day. Weak factory surveys diminished hopes that the economy would enter the year on better footing. As a result, the JPY strengthened from this risk aversion environment and surged 1% to 119.22 against the USD. Noteworthy is also the fact the Chinese currency the CNY, weakened to the lowest level in 54 months (May 2011). Expectations show that this trend could continue in an effort to help China overcome its issues through exports which will be boosted by a weak CNY.
Meanwhile, Middle East tensions between Saudi Arabia and Iran over the killing of a Shiite cleric, have helped boost GOLD (+0.61%) to 1070 from 1062. EURUSD is trading at 1.09 (+0.34%) taking advantage of the risk averse environment which most times weakens the USD. Data wise, it is a pretty busy week and investors will turn their eyes primarily on Friday’s all-important NFP report. For today, German CCPI and US manufacturing data stand out the most.
Trading quote of the day: Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. George Soros
Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.0865
Likely scenario: long positions above 1.0865 with targets @ 1.0915 & 1.094 in extension.
Alternative scenario: below 1.0865 look for further downside with 1.0845 & 1.082 as targets.
Comment: the RSI is well directed.
Pivot: 1.4755GBP/USD
Likely scenario: short positions below 1.4755 with targets @ 1.469 & 1.4645 in extension.
Alternative scenario: above 1.4755 look for further upside with 1.479 & 1.4845 as targets.
Comment: a break below 1.469 would trigger a drop towards 1.4645.
AUD/USD
Pivot: 0.727
Likely scenario: short positions below 0.727 with targets @ 0.7205 & 0.718 in extension.
Alternative scenario: above 0.727 look for further upside with 0.73 & 0.732 as targets.
Comment: the RSI has broken down its 30 level.
USD/JPY
Pivot: 120.2
Likely scenario: short positions below 120.2 with targets @ 119.2 & 118.6 in extension.
Alternative scenario: above 120.2 look for further upside with 120.45 & 120.65 as targets.
Comment: the RSI has broken down its 30 level.
USD/CAD
Pivot: 1.3845
Likely scenario: long positions above 1.3845 with targets @ 1.394 & 1.397 in extension.
Alternative scenario: below 1.3845 look for further downside with 1.3815 & 1.3775 as targets.
Comment: the RSI is bullish and calls for further upside.
GOLD
Pivot: 1063.3
Likely scenario: long positions above 1063.3 with targets @ 1074.3 & 1077 in extension.
Alternative scenario: below 1063.3 look for further downside with 1060 & 1058 as targets.
Comment: the RSI is well directed.
OIL
Pivot: 37.16
Likely scenario: long positions above 37.16 with targets @ 38.31 & 38.87 in extension.
Alternative scenario: below 37.16 look for further downside with 36.8 & 36.2 as targets.
Comment: the RSI is mixed to bullish.
DAX
Pivot: 10780
Likely scenario: short positions below 10780 with targets @ 10400 & 10290 in extension.
Alternative scenario: above 10780 look for further upside with 10890 & 11020 as targets.
Comment: the RSI is bearish and calls for further decline.
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