Daily Outlook Thursday 9th July 2015
Markets are in a recovery mode today as new developments in equity and FX markets have eased investors’ concerns. In China, Shanghai Index is recovering after the government banned big shareholders from cutting stakes for the next 6 months. Most Asian indices are trading higher which can give an indication as to how European ones will open.
EURUSD is over 1.1100 as the Greek Prime minister has accepted a new bailout program which will last over 3 years. Final agreement though will be examined after EU analyzes the set of proposals that will be put forward today as Friday is a deadline.
GBPUSD was under a lot of pressure yesterday but has managed to recover from 1.5320 and is trading at 1.5400 at time of writing. Finance minister George Osbourne trimmed down the expected growth forecast which weighed on the pair.
Action in OIL and GOLD remains muted after a very volatile start of the week. China is mostly related to OIL while GOLD is more moving in an inverse correlation with USD.
The biggest news for today is the BoE rate decision that will likely remain unchanged. At 12:30 GMT US releases unemployment data, which like always are a big mover.
Trading Quote of the Day: “By failing to prepare, you are preparing to fail” Benjamin Franklin
USDCAD
Pivot: 1.2685
Likely scenario: Long positions above 1.2685 with targets @ 1.278 & 1.282 in extension.
Alternative scenario: Below 1.2685 look for further downside with 1.264 & 1.261 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.
USDCHF
Pivot: 0.9405
Likely scenario: Long positions above 0.9405 with targets @ 0.9515 & 0.957 in extension.
Alternative scenario: Below 0.9405 look for further downside with 0.936 & 0.933 as targets.
Comment: A support base at 0.9405 has formed and has allowed for a temporary stabilisation.
OIL
Pivot: 51.4
Likely scenario: Long positions above 51.4 with targets @ 54.7 & 55.35 in extension.
Alternative scenario: Below 51.4 look for further downside with 50.55 & 48.9 as targets.
Comment: The RSI is well directed.
DAX
Pivot: 10915
Likely scenario: Short positions below 10915 with targets @ 10650 & 10535 in extension.
Alternative scenario: Above 10915 look for further upside with 11035 & 11115 as targets.
Comment: As long as the resistance at 10915 is not surpassed, the risk of the break below 10650 remains high.