Global shares are enjoying a so called “relief rally” – a recovery after severe losses, led by the Shanghai Index which is trading higher by over 2%. Last night, Dow Jones and SP500 enjoyed the biggest percentage gain in 4 years. The positive stock environment is benefiting the USD, hence the drop of the EURUSD to 1.1320 levels, from 1.1715 3 days ago. USD was also lifted by surprisingly positive US durable Goods data which added sizeable gains to Monday’s more modest advance. GBPUSD dropped more consistently than the EUR however the losses were contained at the 1.5460 level, which is also the 100 day moving average.

USD is now the 2nd strongest currency of this week, next to the JPY. The main market moving event today will be the US Q2 GDP. Markets expect that the numbers will show a rise of 3.2%. A closely watched event will also be the Jobless claims and pending home sales data as well.

New York Fed’s William Dudley suggested that a rate hike in September appeared less likely now. According to him, “the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago”. Watch out for US data, beating expectations will make discussions about October Rate hikes become more and more likely.

Trading quote of the day:

“Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.”

– Peter Lynch

EURUSD
Pivot: 1.144
Likely scenario: Short positions below 1.144 with targets @ 1.1295 & 1.1235 in extension.
Alternative scenario: Above 1.144 look for further upside with 1.15 & 1.156 as targets.
Comment: A break below 1.1295 would trigger a drop towards 1.1235.

GBPUSD
Pivot: 1.56
Likely scenario: Short positions below 1.56 with targets @ 1.545 & 1.541 in extension.
Alternative scenario: Above 1.56 look for further upside with 1.565 & 1.57 as targets.
Comment: A break below 1.545 would trigger a drop towards 1.541.

AUDUSD
Pivot: 0.719
Likely scenario: Short positions below 0.719 with targets @ 0.704 & 0.7 in extension.
Alternative scenario: Above 0.719 look for further upside with 0.725 & 0.7285 as targets.
Comment: As long as 0.719 is resistance, look for choppy price action with a bearish bias.

USDJPY
Pivot: 118.95
Likely scenario: Long positions above 118.95 with targets @ 121.3 & 122.35 in extension.
Alternative scenario: Below 118.95 look for further downside with 118.2 & 117.1 as targets.
Comment: The RSI is mixed to bullish.

USDCAD
Pivot: 1.324
Likely scenario: Long positions above 1.324 with targets @ 1.3355 & 1.34 in extension.
Alternative scenario: Below 1.324 look for further downside with 1.32 & 1.3145 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

USDCHF
Pivot: 0.9455
Likely scenario: Long positions above 0.9455 with targets @ 0.955 & 0.959 in extension.
Alternative scenario: Below 0.9455 look for further downside with 0.941 & 0.9375 as targets.
Comment: The RSI is mixed to bullish.

GOLD
Pivot: 1140
Likely scenario: Short positions below 1140 with targets @ 1117 & 1109 in extension.
Alternative scenario: Above 1140 look for further upside with 1153 & 1163 as targets.
Comment: As long as 1140 is resistance, likely decline to 1117.

OIL
Pivot: 37.75
Likely scenario: Long positions above 37.75 with targets @ 39.88 & 40.6 in extension.
Alternative scenario: Below 37.75 look for further downside with 37 & 36.2 as targets.
Comment: A support base at 37.75 has formed and has allowed for a temporary stabilisation.

DAX
Pivot: 10270
Likely scenario: Short positions below 10270 with targets @ 9780 & 9550 in extension.
Alternative scenario: Above 10270 look for further upside with 10440 & 10650 as targets.
Comment: The RSI lacks upward momentum.