Asian markets were at last treated to some new year cheer this morning as Chinese trade data beat expectations, offering a glimpse of light for the global economy. Chinese exports posted 2.3% year-on-year gains to December versus -4.1% expected, although the weakening Yuan will have no doubt contributed to the lagging sector.

Nevertheless, Asian shares enjoyed their first real rally of the year as Japan’s Nikkei jumped 2.8% whilst Australia’s battered ASX was also up more than 1%, continuing its recovery from its recent 5 month low.

In the U.S last night, concerns over the turmoil in China saw oil slip to below $30 for the first time in 12 years however, the positive data from China early this morning has pushed it back up above $30.50 for now at least.

Currencies, and USD remains dominant making strong gains yesterday, in particular against the British Pound. As mentioned yesterday morning, manufacturing data proved pivotal as poor figures sent GBP/USD crashing below 1.4400 for the first time in almost 5.5 years.

With the week starting in better fashion than the last, Gold seems to have lost its shine for now as investors look for alternative asset classes and is now back below 1082.

Watch out for crude oil inventories this afternoon at 15.30 GMT as any significant deviation of the forecast could signal a good buy or sell opportunity. This morning, industrial production from the Eurozone at 10.00 GMT is the only other news of note.

Trading quote of the day: “The ability to foresee that some things cannot be foreseen is a very important quality”. – Rousseau

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.086

Likely scenario: short positions below 1.086 with targets @ 1.077 & 1.074 in extension.

Alternative scenario: above 1.086 look for further upside with 1.09 & 1.0945 as targets.

Comment: The pair is trading within a bearish channel.

GBP/USD