Home Markets WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

10/02/2020

 

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

Weekly loss, the biggest of the last 6 months for EURUSD last week. From prices near to 1.11 (1.1094), it closed at 1.0944 with all days (no exception) to be bearish. The factors that created this movement was the coronavirus and the riskaverse mood, US economy better results than the European ones and of course the USA Unemployment Rate that had been announced on Friday with 225,000 new job positions in January versus expectations for 160,000. This week, besides news regarding coronavirus effects in the world economy, there is the testimony of the FEDs President Jerome Powell before Congress where he will present the semi-annual overview of the economy as well as the monetary policy. Finally, on Friday there is the GDP announcements for Germany and Eurozone. The current price level of EURUSD is very close to the support of 1.0940 which holds from last September so it’s possible to see bullish reactions to the price area of 1.10. This will be the main target for our buy positions this week. A possible breakout of 1.0940 would bring the pair to the price area of the beginning of 2017 where it had dropped even below 1.04.

 

GBPUSD

Important price drop for GBPUSD last week. From the price area of 1.3172, closed at 1.2885 with weekly loss close to pips, even if the UK economy announcements (mostly the PMIs) were all above expectations. The fears for the after Brexit era dominated since there are many difficulties for the moment regarding the agreement between UK and EU. Of course, other great factors are the strong USD as a result of the world concerns for a coronavirus epidemic and the strong results of the US economy last week. This week it is important the UK GDP announcement on Tuesday because markets have taken for granted low expectation circa 0% and they wait to see if the UK economy was in recession the last quarter of 2019. Technically speaking, there is an important support at 1.2770 and a breakout would probably end the long-term uptrend for the pair that started from mid-August. Sell is our selection for this week and we’ll close in profit, close to the aforementioned support.

 

USDJPY

Strong bullish reaction we had for USDJPY last week, covering the last two weeks’ losses that had brought it to the area of 108.30. The close price at 109.76 (at the area of 110), confirms the strength of the USD. The results of the Japanese economy last week were not positive while the fears for the coronavirus expansion hold back the pair since many investors keep on investing at JPY as a safe haven asset. Maybe we shall see new attempts of bullish breakout of 110 this week as well as attempts for staying solidly above it. There are no important economic announcements in Japan this week so the news from coronavirus and US economy will dominate on the pair. We’ll try buy positions this week, especially above 110.

 

EURJPY

Last Tuesday we saw an important rise of EURJPY that carried on during last Wednesday and brought the pair above 121 (121.15 was the weekly high) but the pressures of the following days caused a return of EURJPY to the price area of 120 again, so the week was marginally bearish. 120 seems to be a very difficult support to break for the moment so we expect to see bullish reactions bit without the necessary momentum in order to define a clear uptrend. Only real bad news from the coronavirus epidemic may add new buyers on JPY, increasing the probability for prices below 120. Buy positions is our selection for the current week, looking for profits close to 121.

 

EURGBP

Bullish movements for EURGBP last week since from the price area of 0.84, ended at the Friday’s closing, very close to 0.85, having exceeded it during the week up to 0.8538. It was the result of the GBP weakness due to concerns after the Brexit in spite of a strong EUR. After the lows in the beginning of December at 0.83, the pair is moving in a tight range between 0.84 and 0.8540 so the most likely case is to stay into this channel unless some emergency news overturn this balance. Range strategy is our selection for this week into the price channel that we mentioned.

 

USDCAD

Another bullish week for USDCAD, which drove it to the price area of 1.33. At this level there is important resistance so we cannot exclude a stagnation and maybe a correction. The Unemployment Rate in Canada dropped to 5.5% from 5.6% in January and the 34,500 new job positions is also a positive fact for the markets. The oil prices restrained close to $50 last week so maybe we’ll see consolidative movements this week. We’ll try low risk and opportunistic sell positions but in case of a strong bullish reaction above 1.33, we’ll change our positions to buy.

 

USDCHF

Strongly bullish week for USDCHF and from its open at 0.9636, it closed at 0.9775 with all days clearly bullish. The PMI in Switzerland that had been announced early last week it was rathe disappointing and marked CHF in a negative manner that combined to the strong USD, push the pair higher.  The resistance of 0.9840 is now close and this will be our first target for our buy positions this week.

 

AUDUSD

After the first three bullish days that AUDUSD managed to reach 0.6774 there were two bearish days: Thursday and Friday (along with the US Unemployment Rate announcement) so the pair closed marginally lower than its open but not much below 0.67. Last Tuesday, RBA persisted the rates unchanged at 0.75% with no intention for a cut in the next months. In China, earlier today, we saw the announcement of the Consumer Price Index at 5.4%, significantly higher than its previous value at 4.5% and there are voices for a Chinese economy recovery from the big issue of coronavirus. The pair reacts on all these by moving away from the low zone of the last 10+ years. Moreover, if it can stay above 0.67, there are more probabilities for a strong bullish reaction. We’ll listen to this scenario and we’ll open buy positions this week, targeting 0.6750.

 

SP500

Return to the profitability for SP500 which closed at 3,324 points, circa 3% higher, putting an end to the rumors of a further correction. A correction started from 19/1 and had a result of loss close to 3% but the uptrend of last week, all the losses have been recovered. With such a huge liquidity, the Index returned back to the era of new records and all-time highs but it takes a lot of attention because possible corrections cannot be excluded again. We’d better stay out but a forced selection would be short.

 

DAX30

Strong bullish reaction we saw last week for DAX30. It was one of the biggest percentage rises of the last months with a weekly close at 13,475 points and profit above 4%. The Index is flirting with alltime highs at 13,640 points again and it takes lots more attention since such highs cause dizziness and profit taking. Short is our selection this week with main target the price area of 13,350 points.

 

FTSE100

Strongly profitable week for FTSE100 which closed at 7,452 points μονάδες, 2.6% higher. It was a bullish reaction after two bearish weeks, showing us that the price area close to 7,250 points is a “castle” for the Index. Betting on the uptrend continuation, we will open buy positions targeting 7,570 points at the first place and maybe 7,630 points.

 

Gold

Last week we saw a stop to the gold prices uptrend. From the price area of the $$1,590, it closed at $1,570, losing about 1.2%. The very first two days were heavily bearish so the next three with a weak uptrend could revert the whole week. The concerns regarding coronavirus is a strong factor that affects the risk mood, along with the strong USD that hold back gold prices from a bigger rise. USD Index had last week high profits like 1.4% and of course the gold prices were pushed lower. The gold uptrend does not seem to have changed though and as long as the coronavirus will cause angst to the international community the more investors will love gold as a safe selection. The gold prices, since the summer of 2018 have performed a total profit above 30%. We’ll open long positions this week even if we have not seen solid price action above $1,600 since the beginning of 2013.

 

US Oil

It was one more week with oil prices drop but the loss was limited and we saw a bullish reaction below $50. More specifically, the weekly open was at $51.18 and the weekly close at $50.50, with total loss circa 1.3%. A very critical point is the possible decision of Russia for production cut with main target the oil prices holding back from a free-fall. Russian economy is very correlated to the oil prices and low oil prices weaken it very much. $50 is a very critical crossroad and there are two options: either there will be production cut from Russia or/and other OPEC members so the prices will be stabilized and maybe rise either the production will remain as it is and the oil will try prices close to $45, a price area that we saw last time in December of 2018. Since there’s no decision so far, we’ll open short positions this week, we’ll partially close a portion of it at $49.50 and we’ll keep the rest for even lower prices.

 

Bitcoin

With just one more bullish week, Bitcoin climbed above $10,000 on last Sunday (cryptocurrency markets are open during the weekend) reaching up to $10,172 and total weekly profit more than 9%. Early this Monday, Bitcoin is moving again below $10,000 but this cannot alter its success or the crypto investors’ enthusiasm. Of course, some breaths of short-term profit taking may slow a further price rise but we should not forget that in periods close to halving (it will take place next May), usually the crypto markets have a positive reaction. We need to remind that halving is a half reduction of the value of the mining of one block (in May from 12.5 Bitcoins will fall to 6.25 Bitcoins). The previous halvings happened in November of 2012 (from 50 Bitcoins to 25 Bitcoins) and in September of 2016 (from 25 Bitcoins to 12.5 Bitcoins) while the next scheduled are for 2024 and 2028. We also need to underline that this periodical control of the inflation pace through halving is the most important difference between cryptocurrencies and fiat currencies where the money supply is unlimited. If we see prices above $10,000, we’ll open new buy positions again.

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