EU Session Bullet Report

With Taiwan, Hong Kong and South Korea enjoying a bank holiday today, trading has been very light during the Asian session. Follow through for the USD weakness of Friday was not picked up despite the negative performance of the stock indices across the region.

Fed Chair Janet Yellen last Thursday revived prospects of an interest rate hike before the end of the year, easing concerns about slowing global growth that helped the dollar and risk assets, which have suffered on fears over China’s spluttering economy.

Last week, ECB President did not manage to give further clues as to tools the ECB will use in order to revive the economy so the EUR weakness was limited, following USD’s rally. EURUSD inverse correlation with stock markets also helped keep the pair at elevated levels, something that will continue as long as the markets are worried about global growth, especially in emerging markets.

Economic news released today include the US personal spending and income, Inflation data as well as Pending Home Sales. Nevertheless, more focus will be given to the Fed member’s speeches where traders as always will try to gauge information regarding timing of the first interest rate hike.

Trading quote of the day:

“Success consists of going from failure to failure without loss of enthusiasm.” – Winston Churchill

EURUSD
Pivot: 1.1215
Likely scenario: Short positions below 1.1215 with targets @ 1.1155 & 1.1105 in extension.
Alternative scenario: Above 1.1215 look for further upside with 1.126 & 1.1295 as targets.
Comment: As long as the resistance at 1.1215 is not surpassed, the risk of the break below 1.1155 remains high.

GBPUSD

Pivot: 1.524
Likely scenario: Short positions below 1.524 with targets @ 1.513 & 1.509 in extension.
Alternative scenario: Above 1.524 look for further upside with 1.5285 & 1.5355 as targets.
Comment: The upward potential is likely to be limited by the resistance at 1.524.