Over the weekend, China’s Central Bank announced an implementation of some measures to stabilize the CNH markets while the West has announced a liftoff over Iran Sanctions which has drifted OIL prices to new 12 year lows.
As a result, USDCAD opened the week over 1.4600 while AUD, NZD recovered 0.50% and 0.35 % respectively. USDJPY also followed rebounding from 116.50 to 117.35.
In stock markets, the Asian markets were once again in the red with the Nikkei leading the market decline with a 1.11% drop. Last week, US stocks nosedived, extending the worst start to a year so far on record, as the combination of China fears and weak economic data from the US, sparked fears over a global recession.
Heading into Europe, the calendar is empty of significant data and volumes are expected to be thin, since the US is also on holiday as it is Martin Luther King Day.
Later in the week, there is plenty of significant data though, with the ECB interest rate decision being the biggest of them all. Investors will also focus on economic reports out of China with Tuesdays 4th Quarter GDP in the spotlight.
Trading quote of the day:
“In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong.” – William J. O’Neill
Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.0945
Likely scenario: short positions below 1.0945 with targets @ 1.0835 & 1.08 in extension.
Alternative scenario: above 1.0945 look for further upside with 1.0985 & 1.103 as targets.
Comment: the RSI is badly directed
GBP/USD
Pivot: 1.432
Likely scenario: short positions below 1.432 with targets @ 1.4225 & 1.4185 in extension.
Alternative scenario: above 1.432 look for further upside with 1.436 & 1.44 as targets.
Comment: as long as 1.432 is resistance, look for choppy price action with a bearish bias.
AUD/USD
Pivot: 0.686
Likely scenario: long positions above 0.686 with targets @ 0.6935 & 0.6975 in extension.
Alternative scenario: below 0.686 look for further downside with 0.6825 & 0.678 as targets.
Comment: the RSI is well directed.
USD/JPY
Pivot: 117.45
Likely scenario: short positions below 117.45 with targets @ 116.85 & 116.5 in extension.
Alternative scenario: above 117.45 look for further upside with 117.95 & 118.35 as targets.
Comment: the upward potential is likely to be limited by the resistance at 117.45.
USD/CAD
Pivot: 1.442
Likely scenario: long positions above 1.442 with targets @ 1.4595 & 1.4645 in extension.
Alternative scenario: below 1.442 look for further downside with 1.433 & 1.426 as targets.
Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
GOLD
Pivot: 1085
Likely scenario: long positions above 1085 with targets @ 1100 & 1106 in extension.
Alternative scenario: below 1085 look for further downside with 1076 & 1071 as targets.
Comment: the RSI is mixed to bullish.
OIL
Pivot: 30
Likely scenario: short positions below 30 with targets @ 28.2 & 27.8 in extension.
Alternative scenario: above 30 look for further upside with 31.6 & 32.2 as targets.
Comment: as long as 30 is resistance, likely decline to 28.2.
DAX
Pivot: 9720
Likely scenario: short positions below 9720 with targets @ 9320 & 9170 in extension.
Alternative scenario: above 9720 look for further upside with 9945 & 10165 as targets.
Comment: the RSI is bearish and calls for further downside.
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