EU Session Bullet Report - USD/CAD Surges As Oil Collapses

The oil price took another hit yesterday and Brent briefly went below USD30 per barrel, the lowest since April 2004. The oil price appears to be driven by a combination of high supply and growing concerns over the global economy. While there was another bloodbath in Wall Street last night with major indices dropping well above 2%, Asian markets reversed earlier heavy losses and as a result European markets opened in the green this morning.

In currencies, major pairs are stuck in a range, with the exception of the USD/CAD. The Loonie, as it is called, posted another 13 year low on the back of slumping oil prices. Another negative hero was the AUD/USD which posted 4 month lows below 0.70. On the other hand, EUR/GBP cross has posted another high, based on EUR/USD relative stability and GBP/USD continuous decline.

Going ahead, investors will look forward to Germany’s real GDP growth data, scheduled to be released in a few hours. Moreover, the US initial jobless claims data, due later today, will also grab market attention. Bank of England is also scheduled to announce interest rates be later in the day.

Trading quote of the day: “You will always remember the trades that could have been and forget about the risks that were involved.

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.084

Likely scenario: long positions above 1.084 with targets @ 1.09 & 1.0945 in extension.

Alternative scenario: below 1.084 look for further downside with 1.08 & 1.077 as targets.

Comment: The pair has broken above the upper boundary of a bearish channel and remains on the upside.

GBP/USD

Pivot: 1.4475

Likely scenario: short positions below 1.4475 with targets @ 1.435 & 1.43 in extension.

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

Comment: the RSI is mixed to bearish.

AUD/USD

Pivot: 0.6975

Likely scenario: short positions below 0.6975 with targets @ 0.6915 & 0.6895 in extension.

Alternative scenario: above 0.6975 look for further upside with 0.7005 & 0.704 as targets.

Comment: the RSI is mixed to bearish

USD/JPY

Pivot: 118.05

Likely scenario: short positions below 118.05 with targets @ 117.2 & 116.95 in extension.

Alternative scenario: above 118.05 look for further upside with 118.35 & 118.6 as targets.

Comment: the RSI lacks upward momentum.

USD/CAD

Pivot: 1.426

Likely scenario: long positions above 1.426 with targets @ 1.439 & 1.443 in extension.

Alternative scenario: below 1.426 look for further downside with 1.4215 & 1.4175 as targets.

Comment: the RSI is well directed.

GOLD

Pivot: 1084

Likely scenario: long positions above 1084 with targets @ 1099 & 1105 in extension.

Alternative scenario: below 1084 look for further downside with 1075 & 1070 as targets.

Comment: the RSI is mixed to bullish.

OIL

Pivot: 32

Likely scenario: short positions below 32 with targets @ 30 & 29.05 in extension.

Alternative scenario: above 32 look for further upside with 33.15 & 34.3 as targets.

Comment: as long as 32 is resistance, look for choppy price action with a bearish bias.

DAX

Pivot: 10025

Likely scenario: short positions below 10025 with targets @ 9655 & 9580 in extension.

Alternative scenario: above 10025 look for further upside with 10165 & 10290 as targets.

Comment: the RSI is bearish and calls for further downside.