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 continued its uptrend after the strong reaction that it had by reaching the area of 1.1110 two weeks ago. Last week the instrument made about 1.5% but we don’t think that there’s room for continuing this strong trend for more. The price won’t exceed easily 1.1450 and the fundamentals of the European economy do not allow a big ascension. Also, very interesting is that the volatility has been increased significantly during the last days. All these come to a conclusion that range trading is the most appropriate strategy for this week. US Consumer Price Index announcement on Wednesday and Retail Sales Advance on Friday are possible reasons for high volatility.
A short uptrend that took place early last week did not have the necessary strength to move GBPUSD even higher. A short consolidation followed and most likely the big downtrend of the last weeks is very possible to carry on. Daily RSI(14) could not cross over 50 and our custom indicators predict a return to the downtrend. 1.26 is the first visible target and below that, the area of 1.2560. This is a full week of important news for the UK economy including Industrial Production on Monday, Unemployment Rate on Tuesday and the important speech of Mr. Mark Carney in London on Friday.
A consolidation week passed by for USDJPY. Volatility was very low and this gives us the evidence that it was just a break for the long-term downtrend continuation. We may see the price below 108 though. Japanese GDP on Monday, Machine Orders on Wednesday, Tertiary Industry Index on Thursday and Industrial Production on Friday prelude a volatile week.
EURJPY followed the EUR uptrend reaction of the last days. We believe that this is a temporary pullback and that the downtrend is very possible to return again. Price areas of 122 and below that 121.10 remain as main targets/
EURGBP did not reach the target of 0.8925 as we had estimated last week but since it has crossed over 0.89, we consider it as pretty possible to happen very soon. The strong uptrend seems healthy enough to carry on this week too and maybe we see the instrument even above 0.90 this week
USDCAD followed the USD trend last week and turned down with a very strong trend. This trend had the result of breaking important supports which means that it’s very possible that we’ll see the pair even lower. We’re sellers this week with main target the area of 1.3140. The Building Permits on Monday and the New Housing Price Index on Thursday may give the necessary fuel to the pair.
Another successful prediction for USDCHF which continued falling and finally it broke 0.99. We remain sellers and we’re looking for 0.9720-0.9730 as our main target. On Thursday the Interest Rates announcement for Switzerland is a very standard reason to see the pair increasing its volatility.
Last Monday, AUDUSD had a very bullish day and the rest of the week was quite consolidating for the instrument. 0.70 is a serious resistance but a serious breakout of it (not just a few pips) will be catalytic for the pair. Westpac Consumer Confidence on Wednesday and above all the Unemployment Rate on Thursday may be the causes of strong movements for AUDUSD. AUDUSD of course depends heavily on US-China trade talks and volatility is the only sure thing. If we want to bet against USD, we would choose other pair.
AUDJPY stays in consolidation for about 4 weeks while volatility keeps on decreasing. This favours opportunistic range positions at the zone 0.7490- 0.7630.
SP500 had an impressive come back last week. All days were bullish but Tuesday and Friday were really bullish. Despite the US-China trade war, some good news (e.g. a possible agreement between USA and Mexico that will avoid tariffs) is a good reason to open long positions. If the resistance of 2,891.5 points breaks then we may see prices at the area of 2,920 points. Sudden trade war rhetoric may change the conditions unpredictably though.
DAX30 had a serious come back as well. Price moved above 12,000 points and this fact fulfilled the traders and the investors with extra optimism. We favour long positions with main target 12,300 points.
FTSE100 had a clear bullish trend last week. We prefer to stay out this current week due to very fragile conditions of the Brexit. Volatility is very high and sudden news may change the character of the market from time to time.
Gold had an unexpected movement up to $1.348.2 last week but this is clearly an overbought level. We will open sell positions this week and we may see Gold close to $1,300 again. The only factor that favours Gold is a possible fast further deterioration of US.
US Oil approached $50 last week (actually it reached $50.68) but it could not keep these levels and the price took an uptrend direction. We’ll keep on looking for opportunistic positions at the range of $52-$55. We must keep in mind that 50$ is the level where the shale oil extraction becomes unprofitable, so it provides a relatively good entry point for long positions.