EU Session Bullet Report - Bye Bye Euro

Christmas came early for those who bought the USD after Mario Draghi dropped the bomb on the EUR. Yesterday, the ECB President hinted further easing to revive the struggling EU economy. Among those measures, was another deposit rate cut which was out of the question before this meeting. As a result, the market perceived this to be hugely EUR negative and sold the common currency to even 1.1070 lows overnight from 1.1340. The news also sent global equities higher, with DAX and CAC trading up +2%, same as Nikkei and Dow Jones. The dovish ECB stand sent commodity currencies such as AUD, CAD, and NZD surging versus USD, although commodities were quite steady with OIL and GOLD trading around 45.50 and 1170 respectively.

Today’s focus shifts to the EU and US PMI’s with special focus given on technical levels (support and resistances) for EURUSD. The pair has immediate support at 1.1075 and 1.1020 and resistance at 1.1185.

Trading Quote of the Day:

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. Believe me, it will be enough.”

Mario Draghi

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.12
Likely scenario: Short positions below 1.12 with targets @ 1.107 & 1.105 in extension.
Alternative scenario: Above 1.12 look for further upside with 1.123 & 1.1265 as targets.
Comment: The RSI is mixed to bearish.

GBPUSD
Pivot: 1.5435
Likely scenario: Short positions below 1.5435 with targets @ 1.536 & 1.5325 in extension.
Alternative scenario: Above 1.5435 look for further upside with 1.5475 & 1.551 as targets.
Comment: As long as the resistance at 1.5435 is not surpassed, the risk of the break below 1.536 remains high.

AUDUSD
Pivot: 0.7195
Likely scenario: Long positions above 0.7195 with targets @ 0.7275 & 0.7305 in extension.
Alternative scenario: Below 0.7195 look for further downside with 0.716 & 0.713 as targets.
Comment: The RSI is supported by a rising trend line.

USDJPY
Pivot: 120
Likely scenario: Long positions above 120 with targets @ 121 & 121.25 in extension.
Alternative scenario: Below 120 look for further downside with 119.55 & 119.2 as targets.
Comment: The RSI is mixed to bullish.

USDCAD
Pivot: 1.305
Likely scenario: Long positions above 1.305 with targets @ 1.316 & 1.322 in extension.
Alternative scenario: Below 1.305 look for further downside with 1.2985 & 1.293 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

USDCHF
Pivot: 0.9645
Likely scenario: Long positions above 0.9645 with targets @ 0.974 & 0.9765 in extension.
Alternative scenario: Below 0.9645 look for further downside with 0.961 & 0.957 as targets.
Comment: Technically the RSI is above its neutrality area at 50.

GOLD
Pivot: 1172
Likely scenario: Short positions below 1172 with targets @ 1162 & 1156 in extension.
Alternative scenario: Above 1172 look for further upside with 1181 & 1184.5 as targets.
Comment: As long as 1172 is resistance, likely decline to 1162.

OIL
Pivot: 46.1
Likely scenario: Short positions below 46.1 with targets @ 44.85 & 44.45 in extension.
Alternative scenario: Above 46.1 look for further upside with 46.4 & 46.95 as targets.
Comment: As long as 46.1 is resistance, likely decline to 44.85.

DAX
Pivot: 10280
Likely scenario: Long positions above 10280 with targets @ 10750 & 10820 in extension.
Alternative scenario: Below 10280 look for further downside with 10050 & 9885 as targets.
Comment: The RSI is bullish and calls for further upside.

TIME IS IN GMT(+3)