Daily Outlook

January 5, 2016

Global equity markets are sharply lower dragging other asset classes with them. JPY has benefited from the risk off mode and pushed USDJPY down to 118.70, its lowest since October. European stock markets are diving deep into red territory, following earlier Asian Losses caused by concerns over the latest disappointing Chinese data. German DAX is trading -4% while Dow Jones is set for a 300 point dive as China concerns resume. To add to the Chinese drama, tensions between Iran and Saudi Arabia as well as a big Earthquake in India are also souring the taste of how 2016 has started.

On a positive note, GOLD (+1.39%) traders have enjoyed solid and fast gains, as the yellow metal benefited from the above developments and reached 1078 from 1062 on market open. OIL prices have also surged 3% from geopolitical tensions, however gave back its gains based on the Chinese fears later on. As the week started, expectation was for NFP and FOMC minutes to be the focus of the week, next to oil prices, however the Black Swan Called China is now joining the equation, which can contribute towards a result of great unpredictability.

Trading quote of the day: Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. George Soros

Currency Updates:

EUR/USD Intraday: the downside prevails

Pivot: 1.0895

Our preference: short positions below 1.0895 with targets @ 1.078 & 1.0755 in extension.

Alternative scenario: above 1.0895 look for further upside with 1.094 & 1.096 as targets.

Comment: the RSI is badly directed.

Supports and resistances:
1.096 **
1.094 ***
1.0895 ***
1.083 Last
1.078 ***
1.0755 ***
1.0715 **

USD/JPY Intraday: caution.

Pivot: 119.6

Our preference: short positions below 119.6 with targets @ 118.6 & 118 in extension.

Alternative scenario: above 119.6 look for further upside with 119.95 & 120.45 as targets.

Comment: the RSI is mixed and calls for caution.

Supports and resistances:
120.45 **
119.95 ***
119.6 **
119.398 Last
118.6 ***
118 ***
117.35 **

 

GBP/USD Intraday: the downside prevails.

Pivot: 1.4785

Our preference: short positions below 1.4785 with targets @ 1.4645 & 1.462 in extension.

Alternative scenario: above 1.4785 look for further upside with 1.4815 & 1.4845 as targets.

Comment: the RSI lacks upward momentum.

Supports and resistances:
1.4845 ***
1.4815 **
1.4785 ***
1.4707 Last
1.4645 ***
1.462 **
1.461 **
                                               

AUD/USD Intraday: the downside prevails.

Pivot: 0.7245

Our preference: short positions below 0.7245 with targets @ 0.715 & 0.711 in extension.

Alternative scenario: above 0.7245 look for further upside with 0.727 & 0.73 as targets.

Comment: the RSI is mixed to bearish.

Supports and resistances:
0.73 **
0.727 **
0.7245 ***
0.7181 Last
0.715 ***
0.711 **
0.7095 ***

 

SPI 200‏ (ASX)‏ (H6) Intraday: consolidation.

Pivot: 5290

Our preference: short positions below 5290 with targets @ 5180 & 5140 in extension.

Alternative scenario: above 5290 look for further upside with 5320 & 5345 as targets.

Comment: as long as 5290 is resistance, look for choppy price action with a bearish bias.

Supports and resistances:
5345
5320
5290
5211 Last
5180
5140
5100

 

 

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