09/09/2019

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 kept on dropping until last Tuesday where we had the weekly low at 1.0925 and then it moved up for about two days and reached the price of 1.1084 but then it dropped again and closed at 1.1028. It’s obvious that there’s no clear market direction since all traders and investors are waiting the ECB and the Rates Decision on Thursday. On the other hand, Fed Chair Jerome Powell dismissed the fears for an imminent recession, repeating the pledge to do whatever it takes in order to keep the economy growing along with a possible rate cut during the upcoming meeting at mid-September. Technically, the pair was not able to cross-over the important resistance of 1.1080 that would bring it to an uptrend. Our Machine Learning models support the bears so our sell positions will target 1.0980 and 1.0930 but we’ll exit before the ECB monetary policy meeting on Thursday. Besides ECB, other news that may increase the pair’s volatility is German Trade Balance on Monday, US Consumer Credit on Monday, US Mortgage Applications on Wednesday, German Consumer Price Index on Thursday, US Consumer Price Index on Thursday, US Retail Sales Advance on Friday and University of Michigan Sentiment on Friday.

 

GBPUSD

GBPUSD dropped below 1.20 last week allowing us to take both of our targets at 1.2120 and 1.2060. After that, the news that came from UK regarding Brexit fulfilled the marker with optimism and GBPUSD climbed again up to 1.2353 just in two days. More specifically, Members of Parliament are trying to block the planned by Boris Johnson hard Brexit. Last Friday due to NFPs we had a light drop but weekend was turbulent as well due to Amber Rudd’s resign, accusing Johnson for an assault to democracy. The truth is that despite the turbulences and some market news on the current week, there’s a new & fresh wind of optimism in UK so we’ll prefer buy positions, looking for target at 1,2380. Important news for UK economy this week includes Monthly GDP on Monday, Manufacturing Production on Monday, Trade Balance on Monday, Jobless Claims Change on Tuesday and 3M/3M Employment Change on Tuesday.

 

USDJPY

Although USDJPY had a clearly bullish week, we took the first target of 105.90. Strong USD affected the pair more than JPY which finally closed at 106.91. Jerome Powell’s comments dismissing fears of a recession, seem to build a strong support for USDJPY but in the same time our Machine Learning models insist to the bearish signals. This Monday, the Japanese GDP was as expected at 1.3% but GDP Business Spending was at 0.2%, much lower that the expectations of 0.7%. We would prefer short positions for the current week with main targets 106.50 and 106. Some news that may affect the pair and cause high volatility (besides US news that we saw at EURUSD section) include Machine Tool Order on Tuesday, Machine Orders and Tertiary Industrial Index on Thursday and the Industrial Production on Friday.

 

EURJPY

One more week that we approached the long-term target of 115.60 for EURJPY (weekly low was at 115.85). Last Wednesday and Thursday were very bullish while last Friday was more consolidative and stabilized day. Our Machine Learning models have not changed the bearish outlook for the pair so we’ll favour short positions, targeting 117.20 and 116.50 but we must be very careful about ECB Rate Decision & Monetary Policy on Thursday. The announcement of a new easing will cause a free-fall reaction for EUR but in an opposite case we may see EUR even stronger. In any case market will be super volatile so we’ll try to have our positions closed before that day. European and Japanese economies news are mentioned above at EURUSD and USDJPY sections respectively.

 

EURGBP

Last week’s high for EURGBP was at 0.9150, allowing us to benefit our first and main target at the price of 0.9120. News from UK and some rays of hope in the horizon for avoiding the no deal Brexit lead the pair significantly lower at the price area of 0.8950. EURGBP faces the upcoming ECB meeting next Thursday and all the turbulences of Brexit. A possible ECB easing will cause a big drop for EUR and a possible postponement of the no-deal Brexit on 31 October will strengthen GBP even more. All these will take place in a high volatility environment so we’ll avoid to get involved with this pair this week. Other scheduled European and UK economies news are mentioned above at EURUSD and GBPUSD sections respectively.

 

USDCAD

A very dangerous week for USDCAD and our models passed by very successfully since our main target was at 1.3380 and last week’s high was at 1.3382! USDCAD dropped significantly after last Wednesday due to Bank of Canada Rates Decision and pickup in Oil prices. Bearish mood continued on Friday too after NFPs and the pair closed at 1.3169, only 12 pips above the weekly low. News for US and Canada regarding news jobs were opposite: 130K actual vs 160K expected in US and 81.1K actual vs 15K expected in Canada. Positive Oil prices support this downtrend that we will also follow, targeting 1.3080 and 1.3040. Besides US news that we saw at EURUSD sections the current week news for the Canadian economy include Housing Starts & Building Permits on Tuesday and New Housing Price Index on Thursday. The Canadian economy news are minor though and the USD in combination with Oil prices will dominate the pair this week.

 

USDCHF

A very volatile week passed by for USDCHF. The pair was not able to break the important resistance of 0.9935 that we had spotted so it couldn’t approach the area of 1:1. USDCHF closed just 20 pips below the market open last week. The Swiss GDP announcement on Thursday (0.2% vs 0.9% expected) was quite disappointing. We still believe in the bullish outlook for the pair so we’ll open long positions with main target the area of 0.9980-0.9990, just like last week. There is no important news for the Swiss economy this week so USDCHF will be dominated by USD mainly and the CHF safe-haven mood of the investors.

 

AUDUSD

AUDUSD approached our first target early last week but after that, the positive news regarding USA – China trade war gave a big boost to AUD, leading the pair above 0.68 again. The week’s profit was about 120 pips which is quite big for AUDUSD. We believe that we’re in the middle of a rally for the pair and our buy positions will target 0.6920 and 0.6960, although there were some bad announcements for Australian economy early this Monday. 0.70 is a very critical resistance and we’ll avoid it for now. Australian and Chinese news of the week that along with US news will increase the volatility and will affect the pair are the Chinese Consumer Price Index on Tuesday, Australian NAB Business Confidence on Tuesday, Australian Westpac Consumer Confidence on Wednesday and Australian Consumer Inflation Expectation on Thursday.

 

SP500

Last week was very profitable for SP500 as the profits touched 3%. Since the weekly close was at 2,981 points, quite close to 3,000 points which is always a hard resistance, things are complicated. Generally, we’ll stay out this week but if we should select, we’d prefer short positions with target 2,940 points and 2,880 points.

 

DAX30

Very profitable week for DAX30 and for us passed by since we took our first target of 12,040 points and we approached the second target (12,230 points instead of weekly high at 12,204 points). Index finally closed at 12,174 points. The uptrend is undoubtable, our Machine Learning models agree so we’ll open buy positions, looking for target at 12,420 points but before next Thursday and ECB Rates Decision.

 

FTSE100

Profitable week for FTSE100 and for us as well. We took the target of 7,300 points; we missed the target of 7,380 points but Index had a weekly high at 7,356 points. The weekly close though was below 7,300 points and our Machine Learning models show a possible trend reversal. We’ll follow it and our sell positions will have main target at 7,200 points and secondary target at 7,130 points.

 

Gold

Gold last week climbed up to $1,557 and the dropped heavily and closed at $1,506.86 without losing $1,500 in any point. We took our main target of $1,540 but we missed our secondary target at $1,560 for just $3. USA – China negotiations have fulfilled the markets with optimism and the mood for risk has partially returned. Also, FED’s Jerome Powell speech on Friday has strengthen USD and brought the consequence of weakening all the USD denominating assets, such Gold. The trend is bearish but we’ll wait for a breakout of the important support at $1,500 before we open sell positions, targeting mainly the price area of $1,480 and maybe $1,450.

 

US Oil

Second thoughts regarding a global recession had brought US Oil prices up again although we took our main target which was at $53.20. Weekly high was at $57.60 and finally US Oil closed at $56.54. FED’s Jerome Powell speech, good news regarding negotiations for USA – China trade war favour high US Oil prices. This week we’ll follow two options: buy positions with main target the price area of $58.30 and sell positions if price will drop below $56 with target the price area of $53.30 and maybe $52.80.