A rise in core US CPI figures yesterday restored some hopes that the FOMC could still move this year. Asian stocks are mixed today and are looking for direction despite a final hour rise in Wall St. Nikkei is rising, boosted also by a rise in USDJPY which reclaimed 119 levels after positing 118.05 lows. Yesterday’s USD selloff was reversed falling stronger than expected US CPI and jobs data. The strong numbers also impacted GOLD which dropped from a 3 month high of $1190 to $1177 at time of writing. Investors now await the release of EU inflation data for further cues on whether the ECB could extend its QE program. The data could show that inflation in September gained 0.1% on a yearly basis, while remaining unchanged from its level in August. The combination of QE and strong data is something that could possibly make EURUSD plunge in 2016.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.54% at 94.49, after hitting the lowest level since August 26 earlier in the day.
As mentioned, the focus today is EU inflation & Trade Balance as well as US Industrial production and consumer confidence.
Trading quote of the day: “Most traders take a good system and destroy it by trying to make it into a perfect system.”
Currency Updates:
EURUSD
Pivot: 1.142
Likely scenario: Short positions below 1.142 with targets @ 1.1345 & 1.1305 in extension.
Alternative scenario: Above 1.142 look for further upside with 1.145 & 1.1495 as targets.
Comment: As long as the resistance at 1.142 is not surpassed, the risk of the break below 1.1345 remains high.
USDJPY
Pivot: 118.6
Likely scenario: Long positions above 118.6 with targets @ 119.55 & 119.9 in extension.
Alternative scenario: Below 118.6 look for further downside with 118.05 & 117.75 as targets.
Comment: The RSI is well directed.
GBPUSD
Pivot: 1.541
Likely scenario: Long positions above 1.541 with targets @ 1.551 & 1.5565 in extension.
Alternative scenario: Below 1.541 look for further downside with 1.537 & 1.5325 as targets.
Comment: The RSI is mixed to bullish.
AUDUSD
Pivot: 0.726
Likely scenario: Long positions above 0.726 with targets @ 0.7345 & 0.738 in extension.
Alternative scenario: Below 0.726 look for further downside with 0.723 & 0.72 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
GOLD
Pivot: 1176
Likely scenario: Long positions above 1176 with targets @ 1192 & 1196 in extension.
Alternative scenario: Below 1176 look for further downside with 1163 & 1151.5 as targets.
Comment: Intraday technical indicators are mixed and call for caution.
USDCAD
Pivot: 1.295
Likely scenario: Short positions below 1.295 with targets @ 1.283 & 1.28 in extension.
Alternative scenario: Above 1.295 look for further upside with 1.3015 & 1.304 as targets.
Comment: The RSI is mixed to bearish.
USDCHF
Pivot: 0.9525
Likely scenario: Long positions above 0.9525 with targets @ 0.984 & 0.997 in extension.
Alternative scenario: Below 0.9525 look for further downside with 0.93 & 0.91 as targets.
Comment: The pair has broken above its previous top and should post further advance.
OIL
Pivot: 45.8
Likely scenario: Long positions above 45.8 with targets @ 47.85 & 48.6 in extension.
Alternative scenario: Below 45.8 look for further downside with 45.23 & 44.27 as targets.
Comment: The RSI is mixed to bullish.
DAX
Pivot: 9880
Likely scenario : Long positions above 9880 with targets @ 10185 & 10265 in extension.
Alternative scenario: Below 9880 look for further downside with 9725 & 9584 as targets.
Comment: The RSI is above its neutrality area at 50%.
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