Home Markets WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

16/12/2019

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

Clearly bullish was the last week for EURUSD which opened at 1.1059, it climbed until 1.12 on Friday and it finally closed at 1.1117. Prices close to 1.12 is a multimonth high for the pair (from the mid-August) but EURUSD was not able to stay there. The major events of the week were the intentions of the Central Banks (FED και ECB), the UK elections and Donald Trump’s tweets. FED didn’t change the Interest Rates but the speech of Jerome Powell on Wednesday caused a drop at USD. In the next day, after Interest Rates announcement from ECB there was no change as well but the speech of Christine Lagarde strengthened EUR because the general outlook was more hawkish. Also, on Thursday Donald Trump through Twitter said that an agreement between USA and China is very close and finally the UK elections results (see GBPUSD section) had a very positive reflection on the European markets. This week it seems that the pair will try the strong resistance of 1.1170 again but due to lack of important announcements this week, it’s really difficult to escape from the channel 1.10 – 1.12. The prevailing scenario is a pullback to the area of 1.11 and this will be the main target of our sell positions this week. If EURUSD will break 1.11 for good, we will add more size.

 

GBPUSD

The vast victory of Boris Johnson on last Thursday’s UK elections caused an explosion to GBPUSD which had a weekly open at 1.3134, reached up to 1.3515 after the first exit polls and finally after a light correction it closed at 1.3327, returning back to the price area of last spring. Conservatives managed to gather 365 seats and a share of 43.6% while Jeremy Corbyn and his party gathered 32.2% and 203 seats. Now the new government has the required seats to move on to the Brexit implementation and the agreement is expected to appear at the Parliament before the end of the year. All the evidence is for a very strong GBP in the next period, up to 1.42 area but of course it won’t happen immediately. A realistic weekly target could be the price area of 1.36 which is the target for our buy positions this week. Of course, we don’t ignore the important news and announcements for the current week (PMIs, Unemployment Rate, Consumer Price Index but above all the Interest Rates decision on Thursday and the GDP announcement on Friday).

 

USDJPY

Bullish was the last week for USDJPY which opened at 108.63 and closed at 109.34. Some attempts on Thursday & Friday for recovering the price area of 110 failed but the uptrend outlook remains. The positive news around USA and China trade war gave an important boost to USD that had a consolidation movement until the το tweet of Donald Trump on Thursday regarding the tariffs that were about to apply on December, 15th. This news acted like a catalyst and the gathered energy due to low volatility caused this explosive bullish reaction. The fact is that if we don’t see a clear bullish breakout of 110, the uptrend is not confirmed but if it finally happens, we may see prices close to 112. We will wait for the aforementioned breakout in order to be buyers on the pair. Except the possible news and updates on the trade war and the US economy announcements we must pay a lot of attention on the Interest Rates decision on Thursday and the upcoming press release because even if the markets do not expect a change on the rated we may have some hints for stimulus policy against low inflation that would press JPY a lot and would cause a heavy uptrend for USDJPY.

 

EURJPY

Clear and strong bullish was last week for EURJPY. The pair opened at 120.13 and prices always above 120 climbed up to 122.65 after the results of UK elections and finally the weekly close was at 121.57. The uptrend that takes place from September seems solid and strong and possible stimulus news from Bank of Japan on Thursday would bring EURJPY to the price area of 123 and maybe above it. The scheduled news from Europe (mostly PMIs and Christine Lagarde’s speech on Wednesday) may also cause turbulences and high volatility. We will open buy positions and we’re keen to take profit close to 123.

 

EURGBP

EURGBP seems unstoppable at its bearish direction by breaking all the supports one by one. After the weekly open at 0.8419, there were some bullish reactions mostly on last Thursday where we saw prices close to 0.85 but the UK elections results and the Boris Johnson’s Conservatives triumph broke the supports of 0.84 and 0.83. The pair dropped until 0.8277 but some short-term profit taking caused a weekly close at 0.8335. EURGBP is moving to a price area that we hadn’t seen since the summer of 2016 and given that the implementation of Brexit with a deal will procced based on the new Government majority, we’ll take sell positions. The realistic weekly target is the average range of EURGBP for the last weeks which is 130 – 150 pips.

 

USDCAD

Heavily bearish was the last week for USDCAD which opened at 1.3252 and closed at 1.3168. With an exception of a bullish reaction on Thursday, the rest of the days were bearish and the biggest drop took place on Wednesday after the FED Interest Rates decision and Jerome Powell’s press release. Except the Consumer Price Index on Wednesday and the Retail Sales on Friday there are no other important news and announcements this week that could affect the pair significantly. On the contrary, news & progress from the USA – China trade war as well as the Oil prices is expected to be more active factors on the price and volatility of USDCAD. The last weeks the pair is not able to break the sideways channel between 1.30 and 1.33 but if we see a clear bearish breakout of 1.3160, most likely we will see the pair returning to the price area of 1.30. We will follow this option for our sell positions for the current week.

 

USDCHF

A week with a bearish attitude passed by for USDCHF. The weekly open was at 0.9906, it was followed by three bearish days in a row but the volatility increased a lot after the tweet of Donald Trump. There was also an attempt for a bearish breakout of 0.98 (weekly low at 0.9795) but very quickly the pair recovered and closed at 0.9839. From one side the traders & investors have a risk mood but there are cases like the beginning of last week where a mood for safe haven assets such as CHF is very strong. Until this situation clears up, we’d better stay away from this pair.

 

AUDUSD

The uptrend of AUDUSD carried on last week, especially on Wednesday and Thursday due to FED updates and due to the progress on the trade war between the two most strong economies in the world: USA and China. With a weekly open at 0.6832, we had weekly high at 0.6939 and close on Friday at 0.6873. This weekly close below 0.69 bring some doubts and concerns regarding the uptrend continuation for the pair. Early this Monday the positive announcements from Industrial Production and Retail Sales in China could not boost AUD, on the contrary there are certain pressures on AUDUSD. It’s possible to see a pullback week for the pair to the price area of 0.68 and we’ll implement this option by opening sell positions. Of course, possible updates regarding the USA – China trade war may change anytime the behavior of AUDUSD.

 

SP500

The week of uncertainty was followed by a profitable week for SP500 which had profits close to 0.8%. The weekly open was at 3,146 points and the weekly close at 3,171 points while earlier last Friday we saw weekly highs at στις 3,184 points. The uptrend is still up and running but as we have highlighted many times, we are in all times highs and the only active resistances are the round numbers such as 3,200 points. Also, we should not ignore the fact that markets keep on waiting for a price correction and some stage and even if it didn’t happen in the beginning of December it does not meant that we have avoided it. Our strategy is to open long positions and after the profit taking close to 3,200 points, we’ll open short positions.

 

DAX30

Last Monday and Tuesday were heavily bearish for DAX30 and the price dropped below 13,000 points, down to 12,885 points. However, after last Tuesday we saw an uptrend rally which caused not only the losses recovery but some profits as well since the Index closed at 13,307 points with profits almost 1%. It is indeed very difficult to contradict such a strong trend and now the 13,500 is our next target for our long positions this week. From now on it takes a lot of attention though because the price approaches the alltime highs and the probability for a price correction to the area of 13,000 is getting stronger.

 

FTSE100

Important profits for FTSE100 last week that opened at 7,232 points, it had the very first three days of the week a mode of consolidations and expectations but from last Thursday and on it had a strong bullish behaviour which lead to the weekly close on Friday at 7,375 points or profits close to 2%. The results of UK elections indeed affected the investors’ mood and maybe this is the necessary fuel for the Index in order to escape from the sideways channel between 7,000 and 7,400 points, since last August. 7,550 is a realistic scenario for the FTSE100 this week that’s why we’ll take our chances by opening long positions.

 

Gold

Bullish was the last week for gold with a weekly open at $1,459 and a weekly close at $1,475 with profits above 1%. It was the 5th week in a row with low volatility and a consolidation between $1,450 and $1,480. On last Wednesday and after a weak USD we saw a bullish reaction for gold until the price of $1,486.7 but very quickly this profit was trimmed. If gold is able to manage the bespoken channel breakout, the current momentum favors the bulls and after a solid breakout of $1,480, the next target could be the $1,492. This scenario is getting stronger if we consider that the traders & investors kept their buy positions in gold even if the latest news from the trade war and the UK elections results caused a euphoria to the global markets.  Long will be our selection for the current week but above $1,480.

 

US Oil

Another bullish and profitable week for US Oil took place. With a weekly open above $59 and a weekly close at $59.69, profit was like 1%. The volatility also was quite lower comparing with the volatility of the last weeks. On Friday we saw the oil prices above $60, up to $60.34 but we have a solid confirmation that the price area of $60.30 – $60.40 is a strong resistance. After the latest news for an agreement between USA and China and after the UK elections results, the prices of the oil had serious profits but the weekly close below $60 shows that most likely the bespoken news have already been consumed and digested by the markets. Moreover, last week we saw an unexpected supply in USA since the inventories were at 1.41M barrels against expectations for 2.76M barrels. On the other hand, the latest OPEC decisions for productions cuts gather serious arguments, mostly from Russia. The bottom line is that we’re in a very crucial crossroad: either we’ll see a price rally above $60.40 either there will be a retracement to the area of $55. Based on the data that we analysed above, we prefer the 2nd option and we’ll open sell positions.

 

Bitcoin

Bitcoin turned bearish again and now it is seriously dealing with the price area of $7,000. The weekly loss was almost 6% and now all the cryptocurrency investors wonder if the strong support of $7,000 will be a stop for this drop because the next cushion support is close to $6.200. Under this pessimism, only some emergency news & announcements or some positive placements of some notable and prominent market influencers are able to invert the Bitcoin’s downtrend. Just because we cannot count on such expectations, we remain sellers.

Leave a Reply