EU Session Bullet Report – Stocks Rebound, USD Stable – OIL And CAD Tumble

Over the weekend, China’s Central Bank announced an implementation of some measures to stabilize the CNH markets while the West has announced a liftoff over Iran Sanctions which has drifted OIL prices to new 12 year lows.

As a result, USDCAD opened the week over 1.4600 while AUD, NZD recovered 0.50% and 0.35 % respectively. USDJPY also followed rebounding from 116.50 to 117.35.

In stock markets, the Asian markets were once again in the red with the Nikkei leading the market decline with a 1.11% drop. Last week, US stocks nosedived, extending the worst start to a year so far on record, as the combination of China fears and weak economic data from the US, sparked fears over a global recession.

Heading into Europe, the calendar is empty of significant data and volumes are expected to be thin, since the US is also on holiday as it is Martin Luther King Day.

Later in the week, there is plenty of significant data though, with the ECB interest rate decision being the biggest of them all. Investors will also focus on economic reports out of China with Tuesdays 4th Quarter GDP in the spotlight.

Trading quote of the day:

“In bear markets, stocks usually open strong and close weak. In bull markets, they tend to open weak and close strong.” – William J. O’Neill

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.0945

Likely scenario: short positions below 1.0945 with targets @ 1.0835 & 1.08 in extension.

Alternative scenario: above 1.0945 look for further upside with 1.0985 & 1.103 as targets.

Comment: the RSI is badly directed