13/04/2020

 

General Comment

The week that passed by, was marked by the USD weakness in comparison with other currencies and by the profitable stock markets performance. Also, the volatility was lower due to the Easter days. Many European countries are in a remission mode from the coronavirus pandemics but countries such as UK and USA keep on existing in the centre of the interest with increasing numbers in cases and deaths. The over optimism of the markets during the last two weeks may be proved premature, especially after the results of Q1 for a series of important US companies & banks.

 

EURUSD

Bullish reaction for EURUSD last week, although it was in a small scale. From 1.0810, the pair closed at 1.0933 without being able to approach the psychological resistance of 1.10. The coronavirus pandemics along with the decisions of central banks and governments keep on dominating the markets. FED announced new loans of $3.3 trillion and Eurogroup announced support measures of 540 billion euros through ESM. This week, contains some news, mostly the last days but news from the pandemics will have the major role again. EURUSD this period, does not have a specific trend since both currencies are weak so we may see the same scenario again. The political turbulences in Italy regarding the European support measures may give a negative tone for EUR. Range strategy is our option for the current week.

 

GBPUSD

Bullish was the last week for GBPUSD, with a weekly open at 1.2216 and weekly close at 1.2439. GBP took advantage from the obvious USD weakness and from the happy end at Boris Johnson’s health, who recovered and exited the hospital. The news from UK though are not positive at all since till now it has more than 84,000 cases and more than 10,000 casualties. This week does not contain important economic announcements but we cannot ignore the uptrend of the pair which will be clearer after a possible bullish breakout of 1.25. We will open buy positions this week and we may increase our size above 1.25. On the contrary, as long as GBPUSD remains below 1.25, there is a certain probability for a correction.

 

USDJPY

It was a week of low volatility for USDJPY which ranged between 108.20 and 109.40 and a weekly close at 108.38, just 2 pips above the weekly open. The fact is that the pair would have a bigger drop if didn’t have a clear rise of the 10 years old US yield, from 0.63%, to 0.73%. This week seems to favor JPY as a risk-averse trading solution. A clear bearish breakout of 108 will activate our sell positions with target the price area of 107.

 

EURJPY

Bullish was the last week for EURJPY which opened at 117.12 and closed at 118.47 but the main downtrend that has been started from the beginning of the years has not changed. We’ll follow this trend by opening sell positions with main target the price area of 117.

 

EURGBP

Third in a row bearish week for EURGBP, even if the drop and the volatility is getting lower every passing week. The weekly open was at 0.8825 and the weekly close at 0.8770. The downtrend of the pair is obvious so we’ll open sell positions this week with take profit at 0.8650.

 

USDCAD

Important drop for USDCAD last week since the pair closed below 1.40 (weekly close at 1.3950). We can distinguish a light downtrend since March, 20 even if the economic results of Canada were not positive at all. The Unemployment Rate in March climbed to 7.8% from 5.6%, one month ago. The oil prices and the weak USD also have a serious role. By following the developing downtrend, we will open sell positions this week.

 

USDCHF

Weak USD had a result of USDCHF drop last week since from the area of 0.9750, the pair closed at 0.9650 or 100 pips lower. We’ll follow the trend this week too, by opening sell positions with target the strong support above 0.95.

 

AUDUSD

Heavy bullish reaction for AUDUSD last week. The pair started from the price area of 0.60 and managed to close at 0.6347. Obviously, the weak USD had a significant role on this but we should not ignore that China returns to normality and Australia gets over the pandemics since they had only 10 new cases on Sunday. The current week is very critical because we will see the size of the impact at Australia and China in March. On Tuesday we’ll wait to see the Unemployment Rate in Australia while in the same days the Imports/Exports and the Trade Balance in China are announced. Finally, on Friday we should pay attention to the Chinese GDP. The pair’s momentum is bullish so we will open buy positions, targeting the price area of 0.65.

 

SP500

Important rise for SP500 last week with a weekly close at 2,784 points and profit above 12%. The continuous packages from FED and some hopes regarding coronavirus, boosted the US stock market. Early this Monday, the futures of the Index have losses close to 1.3%. The economic impact is not quite visible so far and this creates some concerns but on the other hand, the huge liquidity from DED give many points to the buyers. This week, we have the announcements from a series of US big companies and banks results and we’ll have a better idea on how the coronavirus affected the US economy. The markets are in an over optimism mode and we may see possible corrections, specially if the company results are lower than the expectations. Small and opportunistic trades are favoured this week.

 

DAX30

Very noticeable rise for DAX30 last week, which started from 9,654 points and managed to surpass 10,000 points by closing at 10,667 points and profits circa 10.5%. Today is the Easter Monday and the markets are closed. Generally, the Index is expected to follow the trend of the US markets and all eyes are on the first companies’ economic results.

 

FTSE100

On the same page the British Index FTSE100, performed a remarkable rise with profits like 9% and close price at 5,858 points. In most of the aspects, situation is the same as DAX30.

 

Gold

Explosive rise had the gold price last week since the futures had profits close to 5.5% and a weekly close price at $1,740. Gold is favoured this period as a safe–haven asset but such a big profit leads many investors to liquidation. If USD remain weak and the turbulences from the sellers absorb, we may see another rally for gold, up to $1,800. Important price zone is the area around $1,770 and a possible weakness of exceeding this level may cause issues to the uptrend. In any case, we’re gold buyers this week.

 

US Oil

Big drop for oil prices last week, since the black gold closed at $23.19 and losses above 11%. The OPEC session ended with an agreement for a daily production cut of 9.7M barrels, which corresponds to 10% cut of the daily world production. This cut is the biggest single cut of all times even if there are a few reactions, like Mexico. Mexico will finally cut 100K barrels per day instead of 400K which was the initial request. On the other hand, the demand is extremely low due to the low economic action but the production cut prevents, at least for the moment, a further price drop. We may see bullish reactions so we’ll open long positions this week, looking for take profit prices close to $26.20.

 

Bitcoin

Marginally bullish week for Bitcoin which closed at $6,906 and profits close to 2%. Last Monday was heavily bullish and last Friday was heavily bearish while the rest of the days, including the weekend, were rather neutral. At this period, Bitcoin seems to have a strong resistance at $7,400 so we can observe some serious corrective tendencies that could send it back to $6,000 and this would be the target of our short positions this week.