Home Markets WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by Dennis Dennis

01/08/2019

IMPORTANT DISCLAIMER

The information of this report is of a general nature only. It is not a personal financial advice. It does not take into account your objectives, financial situation and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.

 

EURUSD

EURUSD had a very bearish Monday and then three consolidating days waiting for the NFPs on Friday. Finally, news was better than expected (224,000 instead of 160,000 forecast) for US economy and USD had significant profit, reaching the area of 1.12. So, we took the target of 1.1260 that we had set easily and we believe that this trend comes along with the long-term downtrend that we have spotted and we’ll see EURUSD below 1.12 this week. 1.1185 is our first target where we’ll close a big portion of our sell positions and maybe 1.1140. Important news that may affect EURUSD this week include German Industrial Production on Monday, FOMC Meeting Minutes on Wednesday, US Consumer Price Index on Thursday and Euro-zone Industrial Production on Friday. The new ECB chief Christine Lagarde possibly will try to continue her predecessor’s QE policy , especially under the dismal EU numbers.

GBPUSD

Another strongly bearish week passed by for GBPUSD and the main target of 1.2560 of our sell positions was easily reached. Instrument moved below 1.25 but it recovered quickly since 1.25 is a hard support. This downtrend is here for good so we remain sellers but if only price fall below 1.25. Then our main target is the area of 1.2410. The Monthly UK GDP on Wednesday may give some breaths to GBP since the forecast is positive. Also, on Thursday there is the Financial Stability Report from Bank of England. We have to notice here that for long term positioning in this pair, a possible hint of a Brexit deal by Boris Johnson will give a considerable BUY boost at least for the next couple of weeks/months.

 

USDJPY

Last week, USDJPY closed just 30 pips above the opening, despite the USD power due to NFPs, confirming the justification of staying out. Our Machine Learning models show that most likely this is the time for a new uptrend and we’ll follow it by opening buy positions with main target the area of 108.70 and above this level maybe 109.20. Along with the US news, there are important announcements and events this week for Japan, including Machine Orders on Monday, Labor & Real Cash Earnings on Tuesday and Industrial Production on Friday.

 

EURJPY

EURJPY had an important correction, mostly at the beginning of last week. We believe that this will be a bearish week for EUR in general that’s why we’ll favour sell positions with targets 121.10 and 120.80

 

EURGBP

EURGBP still cannot break 0.90 so we’ll insist to the same strategy as the previous week: We’ll wait until price breaks 0.90 for good (15-20 pips above that level) and then we’ll open buy positions with main targets 0.9060 and 0.9090. At the same time , we keep an eye open to possible Boris Johnson statements (see GBP/USD above).

 

USDCAD

Downtrend confirmed last week, even if NFPs results on Friday gave an extra boost to USD. This week the probability of a downtrend is high and we’ll open sell positions looking for the levels of 1.29. Pay special attention, besides the US news, to Bank of Canada Rates Decision on Wednesday and even the forecast is that rates won’t change, it may cause strong volatility to the pair.

 

USDCHF

Our Machine Learning models were absolutely correct for a bullish reaction of USDCHF, even if we stayed out because the long-term trend is bearish. This week we’ll favour the bulls and maybe we’ll see the instrument close to the area of 1:1 again. The Swiss Unemployment Rate on Tuesday may give some extra strength to CHF as well as the Real Estate Index on Wednesday.

 

AUDUSD

Last week we stayed out because of the important news that caused high volatility and short-term trend reversion. We still believe at the uptrend for the pair and we consider a break-out of 0.70 as very possible. Week is full of news for Australian and Chinese economy that will affect the price and the volatility of the pair, besides US news. More specifically, there are announcements for New Yuan Loans on Tuesday, Australian Business Confidence on Tuesday, Chinese Consumer Price Index on Wednesday, Chinese Direct Foreign Investments on Thursday and Chinese Trade Balance on Thursday.

 

SP500

SP500 has broken the important resistance of 2,960 points last week and it touched the 3,000 points last Thursday. After that we had a light pullback and Index closed at 2,987 points. The trend is definitely bullish but these levels may cause an even stronger correction so we’ll take small & opportunistic sell positions, targeting less than 1% each time.

 

DAX30

DAX30 had bullish reactions last week, mostly on Wednesday but it couldn’t reach the area of 12,850 points. The bullish trend remains and we’ll hunt these levels this week from our long positions.

 

FTSE100

Bullish trend confirmed the first three days of the last week and we took both of our targets of our long positions (7,530 and 7,630 points). Indicatively we mention that last week’s high was 7,632 points so our target was quite accurate. Even if last Thursday and Friday were slightly bearish, we insist on the bullish outlook of the Index and our buy positions will target 7,630 again and above these levels, 7,715 points.

 

Gold

Gold had another crazy week with lots of ups and downs and high volatility. The strong USD may lead Gold at lower levels which is a meaningful reaction for the overbought levels that Gold has reached too. $1,382 is our main target of our sell positions.

 

US Oil

Despite the price correction early last week, we believe that US Oil will move into the range of $55 and $60 this week so at the first place we are buyers with main target below $60 and in such a case we will short the commodity looking for target close to $56.20. This week there is the OPEC’s monthly report (Thursday, July 11) and we must be very careful to the risk we take.

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