16/09/2019
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 had a good downtrend but ECB news on Thursday (new QE up to 20 bn per month and 10 bps rates cut to -0.50% from -0.40%) caused a sharp drop to the pair to its weekly low at 1.0926. Almost immediately, EURUSD recovered because after the ECB stimulus package, markets consider a reaction from FED with expected rates cut by 0.25%, this week on Wednesday at FOMC Rates Decision. Probably EURUSD would have even a better bullish performance but some US fundamentals announcements on Friday strengthened USD. Things got more complicated with the situation in Middle East, after the attacks of 10 unmanned aerial vehicles to the world’s second-biggest oil field in Khurais. US already has blamed Iran for these attacks and safe-haven mood may strengthen USD even more. In any case, we took both of our targets (1.0980 and 1.0930) before EURUSD reversal movement last Thursday. We’ll open small and short low-risk positions on EURUSD with our eyes on FED’s Rate Decision on Wednesday. Targets will be 1.1010 and 1.0970. Other European and US news include German & Eurozone ZEW Survey on Tuesday, Eurozone Consumer Price Index on Wednesday, US Initial Job Claims & Existing Home Sales on Thursday and Eurozone Consumer Confidence on Friday.
GBPUSD
GBPUSD had this strong bullish reaction that we had expected after the fresh & promising news regarding hard Brexit. UK PM Boris Johnson said that he is working to get a deal with EU and from the other hand EU’s sources claim that the new negotiations are in a good shape. We took easily our target at 1.2380 since GBPUSD closed at 1.2501. Monday and Friday were the major bullish days with the mid-week days consolidative and low-range. The attack at oil facilities in Saudi Arabia is the new factor that will affect the markets and since USA has already blamed Iran for this, the risk averse may return globally. Low-risk long positions will be our option for the current week with main target the price area at 1.2570. FOMC Rates Decision on Wednesday dominates the current week but there’s also Rates Decision at Bank of England this on Thursday, with no expected changes on rates though. Besides US news that we saw above at EURUSD section, the other important new for UK economy this week is the Consumer Price Index announcement on Wednesday.
USDJPY
USDJPY had a clear and strong uptrend last week with every day being bullish, causing a Stop Loss activation. This week the pair opened lower than last week’s close, with more than 60 pips gap after the fresh news from Saudi Arabia and oil facilities attack. However, it seems that there’s a gap filling mood during the day, leading USDJPY price back to the area of 108. We won’t get involved this week to the pair due to the complicated geopolitical situation and the contrary to the uptrend bearish Machine Learning signals. Not only FOMC Rate Decision on Wednesday where a 25-bps rate cut expected but there’s also Rate Decision for the Bank of Japan that makes things more complicated. Besides those events, there are important news for Japanese economy that may increase volatility such as Trade Balance on Wednesday and Consumer Price Index on Friday.
EURJPY
A clearly bullish week passed by for EURJPY: even Thursday with ECB news had a big spike but very soon there was a strong bullish reaction and finally the week had about 200 pips profits for the pair or about 1.6%. This week, although there was a 70+ pips gap, lower than last Friday’s close, we remain bullish on the pair and our long positions will target 120.30. European and Japanese economies news are mentioned above at EURUSD and USDJPY sections respectively. Pay special attention to Bank of Japan Rates Decision this week because there may be high volatility. The Middle East news regarding tension and attacks to oil facilities will cause a volatile environment as well.
EURGBP
Brexit promising news caused a quite bearish week for EURGBP and only ECB’s news last Thursday caused a small pullback. Last Friday was super bearish and took back all the Thursday’s retracement and finally the pair closed at 0.8858, or 1.33% lower than the weekly open. We’ll favour the bears this week (with low risk of course since the Brexit environment is still very fragile), targeting the price area of 0.8780. This week is a Rate Decision week for FED, Bank of Japan and Bank of England so volatility is expected to be high in combination with the new crisis in Middle East that we’ve already commented above. Other scheduled European and UK economies news are mentioned above at EURUSD and GBPUSD sections respectively.
USDCAD
USDCAD followed the USD trend and performed important profits last week, close to 1%. Our Stop Loss levels activated on the short positions that we had. USDCAD opened with a big gap this week, 67 pips lower than last Friday’s close due to Middle East crisis. 5% of the world’s supply is currently is out of production after the attack of 10 unmanned aerial vehicles in Khurais. Oil prices impact and affect oil related countries like Canada a lot but this fact is not the only one this week. FOMC Rates Decision on Wednesday and the expected rates cut will cause high volatility and probably unexpected movements because we cannot know in what degree the markets have consumed and digest the expected news. Although there’s an attempt of gap filling, we will prefer low-risk short positions for this week with our eyes always at FOMC on Wednesday. Other Canadian news of the week include Existing Home Sales on Monday, Consumer Price Index on Wednesday just a few hours before FOMC, Payroll Estimates on Thursday and Retail Sales on Friday.
USDCHF
The bullish outlook for USDCHF that we had suggested last week confirmed, even if we couldn’t take our main target at 0.9980 – 0.9990. It seems that there’s a strong resistance below 0.9950 but, in any case, the week was profitable for us. This week the risk of having positions is high not only because the FOMC Rates Decision will cause very high volatility but there’s also the SNB Interest Rates Decision & Monetary Policy Assessment on Thursday although there’s no expected change in Swiss rates. We’ll prefer for the current week, small and opportunistic long trades by taking advantage of the pair’s uptrend in combination with resistances at 0.9950 and 1:1 price. Other news of the week regarding Swiss economy are the SECO economic forecasts on Tuesday and Imports & Exports on Thursday a few hours before SNB Interest Rates
AUDUSD
Last week was bullish for AUDUSD as we had estimated but we couldn’t take our targets. As we have underlined, we exit our positions before Friday’s markets close so we had some profits from our long positions. We keep believing that we are into an uptrend on AUDUSD but our Machine Learning models warn us for a possible reversal movement but higher than the current price levels. Fundamentally speaking, the truce in USA – China trade war and some calm down statements from both sides will help AUD to get higher. Even if there were announcements and some bad news for Chinese economy early this Monday, the pair still keeps its bullish behaviour. We’ll follow the bulls by opening buy positions with the same last week’s targets at 0.6920 & 0.6960. We keep our eyes on FOMC Rates Decision on Wednesday but also on the fundamental news that traditionally have an impact on the pair: RBA Meeting Minutes on Tuesday, Chinese New Home Prices on Tuesday, Westpac Leading Index on Wednesday, Australian Unemployment Rate on Thursday (very important) and Chinese Loans Prime Rates on Friday.
SP500
SP500 had good profits last week (close to 0.8%) climbing again above 3,000 points. We believe that it won’t stay at these levels mostly because there’s a new Oil crisis in Middle East and because of FOMC Rates Decision on Wednesday. Secondary, we believe that prices above 3,000 points are overbought levels for the Index and since our Machine Learning models have a bearish opinion, we’ll open short positions, targeting 2,950 points (1st and main target) and 2,905 points (2nd target).
DAX30
Another profitable week for DAX30 and for us passed by. Index closed at 12,451 points; a bit higher of our target of 12,420 points. This week, Index opened lower with a gap more than 100 points but we’re positive for a quick recovery. We must be very careful though because 12,600 points is an important resistance so our buy positions will target some points below this level.
FTSE100
Profitable week for FTSE100 but not for us although we approached our main target of 7,200 points (7,205 points was weekly low). 7,480 points is the main target for our buy positions this week since our Machine Learning models support the uptrend.
Gold
A bearish week for Gold passed by and although we didn’t reach our main target at $1,480 (weekly low was $1,484.38), it was a profitable week for us (weekly close was at $1,488.60). The attack to the oil facilities during the weekend, followed by a straight blame for Iran by USA, gather clouds of serious concerns in the world financial sentiment. It would make sense a price jump for Gold (as a safe-haven asset) but till now it has losses about 0.2% from the opening price at $1,506.46. We believe (advising by our Machine Learning models) that this week Gold will lose again the price of $1,500 and our short positions will target $1,480.
US Oil
Big jump at US Oil opening prices this week > 13% which is very rare to see unless we have some unexpected events like the one, we had last weekend. More specifically, drones attacked at oil facilities in Saudi Arabia causing a removal of 5% of the world’s supply. We’re pretty sure that there will be a gap filling market reaction for a few hours. Oil facilities may return soon to the production but since USA has already blamed Iran for the attack, war clouds start gathering in the area. We’ll wait to see prices below $58.80 (which is a support for US Oil) before opening long positions with main target the price area of $60.40 and $62.70
