EU Session Bullet Report – USD Rally Pauses, For Now

EU Session Bullet Report

The Dollar Index surge from Friday was halted Sunday and Monday morning, as the rally takes a breather. Last Friday news that China has cut its interest rates for the 6th time, boosted Stock markets and USD to levels not seen since months. This morning, the USD weakness has continued but was limited to AUD and NZD. In other currencies gains are limited, with the USD trading on a back foot for the moment.

It is a busy week with a lot of key economic announcements expected. Today IFO institute will Report sentiment on German Business climate and US will release new home sales. On Wednesday, investors will focus on the monetary policy announcement from the FED for fresh indications on the timing of the initial rate hike.

Last week, the EUR bottomed versus USD after ECB President discussed lowering the deposit rate and added that the European Central Bank could increase its asset purchasing programme (QE).

Trading Quote of the Day:

“The size of greatness inside of you is measured by the challenges you overcome.”

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.114
Likely scenario: Short positions below 1.114 with targets @ 1.0975 & 1.0935 in extension.
Alternative scenario: Above 1.114 look for further upside with 1.12 & 1.123 as targets.
Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

GBPUSD

Pivot: 1.538
Likely scenario: Short positions below 1.538 with targets @ 1.5305 & 1.529 in extension.
Alternative scenario: Above 1.538 look for further upside with 1.542 & 1.5475 as targets.
Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

AUDUSD

Pivot: 0.7195
Likely scenario: Long positions above 0.7195 with targets @ 0.7305 & 0.7345 in extension.
Alternative scenario: Below 0.7195 look for further downside with 0.716 & 0.7135 as targets.
Comment: The RSI is well directed.

USDJPY

Pivot: 120.75
Likely scenario: Long positions above 120.75 with targets @ 121.7 & 122.3 in extension.
Alternative scenario: Below 120.75 look for further downside with 120.25 & 119.55 as targets.
Comment: The RSI lacks downward momentum.

USDCAD

Pivot: 1.307
Likely scenario: Long positions above 1.307 with targets @ 1.322 & 1.325 in extension.
Alternative scenario: Below 1.307 look for further downside with 1.3035 & 1.2985 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

USDCHF

Pivot: 0.971
Likely scenario: Long positions above 0.971 with targets @ 0.9815 & 0.9845 in extension.
Alternative scenario: Below 0.971 look for further downside with 0.9645 & 0.961 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

GOLD

Pivot: 1170
Likely scenario: Short positions below 1170 with targets @ 1158.6 & 1156 in extension.
Alternative scenario: Above 1170 look for further upside with 1175 & 1179.5 as targets.
Comment: As long as 1170 is resistance, expect a return to 1158.6.

OIL

Pivot: 45.71
Likely scenario: Short positions below 45.71 with targets @ 44.1 & 43.72 in extension.
Alternative scenario: Above 45.71 look for further upside with 46.4 & 46.95 as targets.
Comment: As long as 45.71 is resistance, likely decline to 44.1.

DAX

Pivot: 10460
Likely scenario: Long positions above 10460 with targets @ 10910 & 11000 in extension.
Alternative scenario: Below 10460 look for further downside with 10280 & 10050 as targets.
Comment: The immediate trend remains up and the momentum is strong.