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.
Last week started with a bearish trend for EURUSD which dropped until 1.1066 (from the weekly open at 1.1081), the next three days were rather calm due to holidays and due to low volatility but on Friday we saw a big price rising. Price of 1.11 was easily broken and finally the pair closed at 1.1176. We hadn’t seen those prices since mid–August and it’s quite obvious that USD is very weak, mostly for two reasons: the risk-on sentiment pushed the investors to alternative markets and some actions from FED to the direction of quantitative easing. Early this Monday the price of the pair is moving above 1.12 and if it can manage to stay at this level then the price area of 1.1270 is very realistic and it could be the target of our buy positions for this week. Low volumes and low volatility are expected to carry on this week as well. We also remind that the current week is not so active fundamentals wise with maybe the exception of next Friday where we have the announcement of FOMC Minutes.
There was some kind of bullish reaction for GBPUSD which opened at 1.30 and even if it dropped the first two days to the area of 1.29 (weekly low at 1.2905), finally after last Wednesday started to climb and it closed at 1.3080. The truth is that the uncertainty regarding Brexit, based in ambiguous statements from UK and EU parts does not allow GBP to breath deeply and to have a clearer uptrend. Statements, rumours and whispers from UK and EU officers are able to change the trend of the pair any time combined with the lack of scheduled news. A very big factor lately is also the weak USD for the reasons that we mentioned at EURUSD section. Technically speaking, the uptrend may continue up to the price area of 1.32 and this will be our selection this week. On the other hand, a possible sentiment reversion or news regarding Brexit may lead to a correction below 1.30 again.
Somehow USDJPY is kind of weird the last days since during last week it was the only major USD pair that did not affected very much from the USD drop. The weekly open was at 109.45 and the weekly close a bit lower at 109.42. This Monday the pair has a strong bearish trend to the area of 109, reacting with delay time. There is an obvious wave of buyers in alternative markets while some FED’s actions with bonds that act like a new QE, pushes the USD holders to sell. Most of the news that have been announced last Friday, judged by the markets as positive for the Japanese economy, especially the Consumer Price Index and the Unemployment Rate which was at 2.2% in November. The price of 110 seems unbeatable for the moment and if the risk mood stays then nor the support of 109 will be able to stand and maybe we will see USDJPY close to the price area of 108.50. The short direction with the bespoken target is our selection for this week.
After a bearish Monday, followed by two passive days where EURJPY approached 121, we saw a bullish Thursday followed by a more bullish Friday that lead the pair to the area of 122.40. The uptrend that started from the beginning of September and the price of 116 is still on and on even if we see some interruptions from corrective movements. If prices climb above 122.65 then we will enter to a price zone that we have not seen since the end of June and so there is a strong probability to witness a bearish correction to the price area of 121 again, strengthened by the markets risk mood which always gives credits to JPY. Short is our selection for this week, looking for a profit close to 121.
EURGBP did not react bearishly as expected last week and furthermore we saw another price rise. The Brexit uncertainty dominated and during last Tuesday the price approached at 0.86 which would be a zone that we saw last November where the uncertainty was in alert levels due to upcoming UK elections that followed. The next days we saw some corrective reactions but the weekly close was at 0.8540, above the weekly open of 0.8519. The weakness of EUR makes possible a scenario for a further drop of EURGBP to the area of 0.85 and other some special circumstances, even lower. So, we’re sellers this week, targeting the price area of 0.8420.
The drop of USDCAD is unstoppable the last weeks since we saw a 5th in a row bearish week. The oil prices rally is a critical factor for this as well as the weak USD and so from the weekly open at 1.3148 last Monday we ended at 1.3064 on last Friday. Such a strong downtrend intrigues the investors to become sellers but we are in front of the price of a possible breakout 1.30 which has failed two more times: in mid-July and in the end of October, developing what we call a “double bottom”. So, a retracement to 1.31 or even higher to 1.3160 seems possible and these will be our major targets for our buy positions this week.
The bullish reaction of USDCHF that attempted early last week was finally beaten up by the weak USD on last Friday and from the weekly open of 0.9814, the pair finally closed at 0.9741. It was the 4th bearish week in a row and now the evidence for a downtrend channel is strong. Early this Monday the pair keeps on moving bearishly to the area of 0.97, which is a price area that we had not seen since the mid-August period. A possible breakout of 0.97 will open the road for prices close to 0.9580, favoring sell positions and this would be our selection this week.
The weak USD of last week affected AUDUSD in a great degree which made more than 80 pips since the weekly open was at 0.6895 and the weekly close at 0.6978. The strengthening of AUD was also assisted by the positive news from USA – China trade war but mostly from the Chinese Industrial Profits last Friday where we saw a huge recover of 5.4% in November versus -9.9% in October. The pair keeps on moving bullishly, approaching the price of 0.70 but this area of a very strong resistance and a possible breakout could bring AUDUSD close to the zone of 0.7030 – 0.7040 which is also a resistance. We’ll take our chances targeting this level for our buy positions this week.
Another bullish week passed by for SP500, even is the profits were lower. By opening at 3,223 points and closing at 3,235 points, the profits were like 0.37%. The main situation has not changed: the buyers keep on making money and all these that are await of the so-called correction or a big drop, were waiting another week in vain. SP500 breaks one record after the other with continuous all-time highs and only some round prices such as 3,250 and 3,300 points which are always psychological resistances, make some sense for the investors and the traders of the US stock markets. We remain buyers and round numbers is our taking profit targets as well.
DAX30 was in anticipation for a 3rd week in a row which opened 13,310 points and closed a bit lower at 13,299 points. The public holidays was a main reason for this outlook which is always combined with low volumes and low volatility. The uncertainty that has been developed the last weeks as well as the price squeezing would lead to a price explosion at some stage. We should wait and see if this will take place in the current week or later but since we’re unable to estimate the direction, we’d better stay out for the moment.
Bullish for the 3rd week in a row was last week for FTSE100 which opened at 7,573 points and closed at 7,633 points or profit close to 0.8%. The Index recovered to the price area of last July and it could climb if the conditions allow it, even close to 7,800 points. The point is that we distinguish some technical evidence for a price correction to the area of 7,430 μονάδες and by trusting it, we’ll open short positions this week.
The bullish scenario for the gold price was successfully confirmed since the price from $1,478 ended to the price area of $1,511 with profits close to 2.2%. It was the biggest percentage change for the last weeks but we need to underline that the last time that the gold price approached the area of $1,515 last October, it was followed by a brutal drop and pullback to the area of $1,460. Of course, this could mean nothing and gold prices could continue the strong uptrend, up to $1,550 with an intermediate pause at $1,532. A helpful factor for this could also be the obvious weakness of USD which pushed the investors to the commodity markets. We’ll trust the long direction and our main target is the price of $1,532.
Strongly bullish was last week for the US oil prices with a weekly open at $60.28 and a weekly close at $61.58 with profits above 2%. The strong uptrend that has been developed the last period, could push the oil prices even close to $64 since the OPEC decisions for production cuts favour price risings and the expectations for a happy end to the USA – China trade war send positive messages to the markets for a strong economic growth. Of course, a big factor was also the weak USD and we should not forget that oil is denominated in USD. The risk–on sentiment in the global markets would have important significance in the next period of time and some reactions to the production cuts (especially from the side of Russia) could be basic reasons for a retracement to the area of $60. We select the first scenario though by opening long positions, looking to sell close to $64.
The bullish reaction of Bitcoin was not continued since from the price area of $7,500 in the beginning of last week, it closed near to $7,385, almost 1.5% lower. It was the 5th in a row week of low volatility for Bitcoin which seems prisoned in the uncertainty of the traders and in some technical levels of supports and resistances, such as $6,880 and $7,540. The strategies that act better is such cases are the breakout strategies (either bullish or bearish breakout) because the traders in some stages will make decisions. Putting breakout orders to both directions, would be our selection for this week as well.