EU Session Bullet Report

Stronger risk appetite drove stocks higher on Wall street yesterday, with the Dow Jones and S&P continuing their recent bullish march. S&P 500 is now trading above 2100, an important psychological level which may now see it test its record highs from earlier in the year.

The mood spilled over in to Asia this morning with the Shanghai composite up more than 4% on the day. President Xi was quoted as saying, that China can maintain annual economic growth of around 7% over the next 5 years.
As the positive move gathered pace, investors sold safe-haven bonds as they moved into riskier assets, driving US treasury yields and in turn the US dollar higher.

EUR/USD hit lows of 1.0935 and is now at 1.0945 at time of writing so further downside can not be ruled out. USD/CHF is also one to watch as it quietly continues its strong upward trend. The pair is trading more than 450 points higher from its low of 3 weeks ago.

Gold took a hammering yesterday, recording it biggest daily drop in 5 weeks to reach a 1 month low of 1114.26 before climbing back to 1120 at time of writing.

Elsewhere, Oil continues its recent recovery tipping just over $48 yesterday before falling back to $47.80, up 10% from last Wednesday.

Today, we can expect the action to continue as we have ECB President Mario Draghi due to speak at 08:00 GMT. Also, services PMIs from the Eurozone and UK this morning is followed by ADP employment data from the US this afternoon.

Trading quote of the day: What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower. William O’Neil

Green lines are resistance, Red lines are support

Pivot: 1.1005
Likely scenario: Short positions below 1.1005 with targets @ 1.0895 & 1.085 in extension.
Alternative scenario: Above 1.1005 look for further upside with 1.103 & 1.107 as targets.
Comment: The RSI is badly directed.

Pivot: 1.545
Likely scenario: Short positions below 1.545 with targets @ 1.5355 & 1.5305 in extension.
Alternative scenario: Above 1.545 look for further upside with 1.55 & 1.553 as targets.
Comment: The index currently faces a challenging resistance area at 1.545.

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