EU Session Bullet Report – Stocks fall along with oil, EURUSD surges
There was a broad USD selloff that was ignited by a short lived recovery in commodity prices. Oil surged initially after data revealed less than expected inventory buildup. As a result GOLD also rose to 1084. EURUSD broke higher than 1.0980 which was post ECB high, and reached as high as 1.1041. Also, ECB governing council member Ewald Nowotny’s comment also provided further support to Euro. In short, Nowotny noted that the pre-ECB meeting expectation was “really a massive failing of market analysts” and the central bank didn’t gave a “false signal”. That is, markets were wrong in anticipating the larger than expected stimulus from ECB.
Australian dollar is boosted strongly higher today by another month of spectacular job data. The job market expanded by 71.4k in November, much better than expectation of -10k contraction. The USD/CHF bounced off two-month low near 100 DMA and now extends higher towards the mid-point of 0.98 handle. Stock indices fell for the 3rd straight session yesterday and during Asia today, as earlier gains evaporated alongside the drop in Oil prices. Data wise today we’re focusing on the SNB and BOE interest rate decisions.
Trading quote of the day: “A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate with working smarter. In fact, sometimes is the other way around.” – Martin Schwartz, in Pit Bull
Green lines are resistance, Red lines are support.
EUR/USD
Pivot: 1.0945
Likely scenario: long positions above 1.0945 with targets @ 1.104 & 1.109 in extension.
Alternative scenario: below 1.0945 look for further downside with 1.09 & 1.086 as targets.
Comment: the RSI lacks downward momentum.
GBP/USD
Pivot: 1.511
Likely scenario: long positions above 1.511 with targets @ 1.52 & 1.5245 in extension.
Alternative scenario: below 1.511 look for further downside with 1.5075 & 1.5035 as targets.
Comment: technically the RSI is above its neutrality area at 50.
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