European Markets rally

European stocks broke a 5 day losing streak early today despite woes in China where the Shanghai Composite fell a further 1.7% today following it's 8.5% slump on Monday.

In Europe, traders were boosted by positive earnings news which gave a lift to major stocks by almost 1%.

GBP was up against most major currencies folloiwng news that the economy grew in Q2 by 0.7% compared to 0.4% in Q1 which was aided by a big jump in Oil and Gas production. GBPUSD broke the 1.5600 mark briefly before retracing back to 1.5575 at time of writing.

It seems that with improved economic data from both sides of the Atlantic, the race is on between the US and UK as to who will be first to raise interest rates.

Elsewhere, Gold is still trading in a tight range between $1090 – $1100 whilst Oil slipped further down hitting a session low of $46.48 per barrel before climbing back to $47.40 at time of writing. Crude Oil inventories may certainly be worth watching out for tomorrow.

Trading quote of the day:

“The markets are the same now as they were five or ten years ago because they keep changing-just like they did then.” – Ed Seykota

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.113
Likely scenario: Short positions below 1.113 with targets @ 1.0995 & 1.096 in extension.
Alternative scenario: Above 1.113 look for further upside with 1.116 & 1.1195 as targets.
Comment: The RSI is badly directed.

GBPUSD
Pivot: 1.5535
Likely scenario: Long positions above 1.5535 with targets @ 1.5625 & 1.567 in extension.
Alternative scenario: Below 1.5535 look for further downside with 1.5495 & 1.5465 as targets.
Comment: The RSI is well directed.

AUDUSD
Pivot: 0.734
Likely scenario: Short positions below 0.734 with targets @ 0.7255 & 0.723 in extension.
Alternative scenario: Above 0.734 look for further upside with 0.738 & 0.7415 as targets.
Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.