EU Session Bullet Report – Super Mario Does It Again

Mario Draghi once again surprised investors with his drastic change in heart.A rather hawkish Draghi reversed his stance on Thursday afternoon and adopted a definite dovish persona. Once again he seems to be promising markets additional stimulus at the March meeting, but this is a song that Draghi has played before. The euro dipped 100 points during Draghi’s press conference but recovered just after.

The cable recovered marginally to trade at 1.4190 as markets continued to price in political risks linked to the British economy. GBP appreciated by 0.19 percent in yesterday’s trading session on the back of weakness in dollar. However, sharp upside was capped on the back of mixed economic data. UK unemployment fell unexpectedly in December whereas UK average earnings declined more than forecasted.

Oil prices diverged on Friday morning with WTI adding 18 points to 29.72 while Brent oil dipped 8 points to 29.53. U.S.Crude inventories climbed to the highest level since 1990.

Gold prices were driven lower on Thursday by the stronger U.S. Dollar. The inability to take out the previous top at $1113.10 on Wednesday is also a sign of increasing selling pressure. Stronger U.S. equity markets are also adding to the weakness in the gold market.

Trading quote of the day: There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. Paul Tudor Jones

Technical Analysis

Green lines are resistance, Red lines are support.

EUR/USD

Pivot: 1.0895

Likely scenario: short positions below 1.0895 with targets @ 1.0805 & 1.0775 in extension.

Alternative scenario: above 1.0895 look for further upside with 1.092 & 1.094 as targets.

Comment: the RSI is bearish and calls for further downside.