9/12/2019
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
It was a bullish week for EURUSD after the financial results & news that had been announced, until last Friday where the pair’s trend changed. More specifically, PMI Indexes of USA in the beginning of the week had results worse than the expected values while the results from Germany and Eurozone were rather positive. This had the result of pressures on USD and EURUSD pair exceeded 1.11 with a weekly high at 1.1116. On Friday afternoon though, the announcements of the US job market released and despite the expectancies of 180K new job positions, the result was obviously better at 266K new jobs. This fact gave strength to USD and the pair finally closed at 1.1061, while during the day we saw low prices at 1.1040. In the current week, besides the scheduled news & announcements, there’s also the strong factors of USA – China trade war as well as the UK elections. Markets do not expect any changes on the Interest Rates for both FED and ECB but we cannot exclude statements and claims regarding the monetary policy that may affect the markets for the next period of time. The volatility also keeps on increasing but EURUSD needs more fuel in order to escape either above 1.11 or below 1.10. Range trading between this channel will be our trading strategy selection this week.
GBPUSD
Strong profits last week for GBP against USD. The weekly open was at 1.2909 and the weekly close at 1.3133 with an easy breakout of the psychological resistance of 1.30 since now the markets have a clear outlook regarding UK elections. The last polls give a 2-digit victory to Boris Johnson and last week’s debate was neutral because both Johnson and Corbyn had a defensive presence, avoiding possible mistakes. We are traversing the elections week that will take place on Thursday Dec. 12 and the most possible scenario is that traders and investors will be in a stand-by mode till then. Any news from USA monetary policy on Wednesday may cause high volatility but since the pair’s prices fully recovered from its uptrend that begun last spring, the big news will come from UK elections. As long as Boris Johnson will have a clear victory, we expect to see strong GBP, especially if it will be combined with positive statements for Brexit deal. We will wait until elections in order to define a trading strategy but we’re positive to be buyers after the first results.
USDJPY
Clearly bearish was last week for USDJPY with a weekly open at 109.53 and a weekly close at 108.57, almost 100 pips lower. A main feature of last week’s prices was that even with impressive news from US jobs markets, the pair had a very weak reaction. It could not exceed the price of 109 and markets have serious doubts of the uptrend that begun in last August will carry on. Relationships between USA and China are stuck with no obvious progress despite some encouraging news, mostly by President Trump but in any case, the tariffs kick-off date at 15/12 is getting closer and closer. It’s very possible to have increasing pressures in USD and so USDJPY may approach the price area of 108 again. This will be the main target of our sell positions this week.
Early this morning we had the announcement of the Japanese Q3 GDP with pretty impressive results of 1.8% versus expectations of 0.6%. JPY keeps on boosting and the USDJPY pair is dropping even more.
EURJPY
Last week was bearish for EURJPY as last Monday which opened at 120.73 was a neutral day, last Tuesday and Friday were clearly bearish and Wednesday/Thursday had weak bullish reactions that could not revert the weekly trend so finally the weekly close was at 120.11. After the recent announcement regarding Japanese GDP (see USDJPY section) the momentum of the pair seems pretty bearish but the important price support of 120 seems to be a die-hard case, at least for the moment: it did not breakout on last Friday where it reached until 120.003 not even early this Monday. We will wait for a solid breakout of 120 and we’ll open sell positions, targeting the price area of 119.40.
EURGBP
Another bearish week passed by for EURGBP with a bigger drop than the previous weeks. After last Monday where we saw a weak bullish reaction, we had a chain of bearish days. The weekly open was at 0.8537, we saw an easy bearish breakout of 0.85, pair dropped until 0.8411 and it finally closed at 0.8418. The UK elections on Thursday will put traders and investors in a holding mode and since markets have taken for granted the victory of Boris Johnson, we expect to see high volatility after the date of the elections. A clear and beyond expectations victory of Johnson will strengthen GBP even more but we should not ignore that we’re already into a price zone that we haven’t’ seen since the spring of 2017, that’s why we will avoid trading EURGBP this week.
USDCAD
Slightly bearish was last week for USDCAD with a weekly open at 1.3274 and close at 1.3251. The biggest factor during the week was the hawkish mode statements from Bank of Canada for the next period of time, even if Interest Rates stayed unchanged at 1.75%. Also, an important factor was the US Oil prices rally during last week. In any case, the drop of USDCAD smartened a lot on Friday after the NFPs results and we saw a clear bullish reaction from the Thursday lows at 1.3158. The pair returned back to its ordinary price zone below 1.33 and since it’s possible to try to breakout 1.33 for one more week, we’ll try long positions with main target the price area of 1.3320.
USDCHF
Heavy pressures for USDCHF last Monday and Tuesday, after the disappointing announcements from USA PMIs. The pair started the week very close to 1:1, it dropped on Tuesday until 0.9857 and the rest of the days were relatively bullish with a peak highlight on Friday were USD had serious profits due to NFPs. After that, USDCHF won the bet of staying above 0.99. The bottom line is that the 1:1 breakout attempt failed for one more week so the pair remained in the channel of 0.9830 – 1 which has been developed the last few weeks. Given the price close above 0.99, we conclude that most likely we are in front of a bullish week that is why we’ll take buy positions. Since we believe that it is very difficult to see prices above 1:1, we’ll take our profit a few pips below this area.
AUDUSD
The expected bullish reaction of AUDUSD, finally took place and the pair with an important uptrend in the beginning of last week (weekly open at 0.6768) climbed above 0.68 again, closing at 0.6843. Strong USD on Friday due to NFPs could not bring AUDUSD below 0.68 again so we have increased probability to see an uptrend continuation this week as well. Under this scenario, we’ll take our chances by trying long positions, targeting the price area of 0.6880. Last week’s news from Australia and China did not have a bad evaluation by the markets but from now on the critical factors will be the USA – China trade war with the deadline of tariffs application to come closer and closer.
SP500
Heavily bearish were the two first days of the last week for SP500 Index. With a weekly open at 3,146 points, dropped until 3,070 points on last Tuesday (losses close to 2.5%) and some of the analysts thought that the expected price correction after the crazy rally of the Index was taking place. From last Wednesday and on, this scenario was proved to be wrong since SP500 had a strong bullish reaction that took back all the losses and finally the Index price was very close to its opening price in the beginning of the week. If we see prices above 3,155 points this week, we’ll try long positions targeting the psychological resistance of 3,200 points but on the contrary, if the Index will have serious difficulties in exceeding 3,155 points, most likely it will have as a result the return of the prices into the tight channel between 3,100 and 3,150 points.
DAX30
DAX30 started last week with a heavy drop from 13,240 points until 12,985 points (losses close to 2%) as a result of the prices squeeze that we had spotted at last week’s report. The rest of the days, there was a bullish reaction that limited the biggest part of the losses and finally the closing price was at 13,174 points or circa 0.5% below the weekly open. In front of the Index now, there is the strong resistance of the 13,300 points and the bet of approaching it or breaking it out. Bases on this, we’ll take long positions for the current week since it seems that the price area of 13,000 points is safe enough for the moment.
FTSE100
Important drop for the British Index FTSE100 last week since it opened at 7,350 points and closed at 7,230 points, losing about 1.6%. During the week we saw prices even at 7,128 points but the bullish reaction on Friday limited the losses. Most likely, the investors of the UK markets will wait until the elections on Thursday in order to open positions and if the results favor Boris Johnson and his party, maybe we’ll see a boosting on the stock market of the country. If such a possible victory will be combined with encouraging news regarding Brexit then maybe we’ll see a rally above 7,400 points. On the contrary, possible elections surprises will increase the uncertainty of the markets and maybe it will cause a correction for the Index to the 7,000 points.
Gold
Gold started last week with bullish trends that were implemented mostly during last Tuesday and in the early Wednesday we saw prices close to $1,484 but at this level the prices were stabilized. On Friday though and after the super news for the US jobs market, USD had serious profits, pressing the gold prices to the area of $1,460 again (Friday lows at $1.458,7) and finally the weekly close was at $1,460. Given that the gold prices could not keep its uptrend by staying close to $1,480, now all the traders and investors eyes are on possible surprises regarding FED Interest Rates and on the USA – China trade war. The international environment is rather quiet and calm so putting money to safe haven assets such as gold is not an issue for the moment. So, most likely we will see gold trying to reach the price area of $1,450 which is the main target for our short positions this week. If there’s a bullish reaction though, the most realistic target is $1,480.
US Oil
Important profits for US Oil in the week that passed by. “Black Gold” opened at $55.45 and closed at $59.05 with profits close to 6.5%. In the OPEC meeting, its members and allies agreed on further production cuts. The agreement contains production cuts 500,000 barrels per day for the 1st quarter of 2020 and after that the total production cuts will be 1.2 million barrels per day. Under these circumstances, the oil prices could not climb above $60 and if we keep in mind that some non-OPEC countries such as Russia have serious concerns in obeying to this agreement, most likely we will see the prices of oil to return back to the price area of $55. The markets seem to have “digested” the OPEC decisions and the global reactions so now the microscope of the markets is on any possible progress of the USA – China trade war and on the higher and higher demand from USA. Short will be our selection for this week, targeting $55.
Bitcoin
The bullish reaction of Bitcoin had a light continuation last week that brought the biggest cryptocurrency of the world close to the price area of $7,500 again. Last week had also a range close to 5%, from $7,412 to $7,773. The volatility is getting lower and now the next target for the uptrend is the price area of $7,780. On the other hand, it seems that Bitcoin has strong bullish reaction around the area of $7,000 so the probability of a further growth is bigger. We’ll trust this scenario by opening buy positions this week. We need to mention though that the cryptocurrency markets that have no fundamentals and underlying assets, usually move through supply/demand and speculation. News regarding cryptocurrencies technology, regarding cryptos regulation and news for exchanges and their reliability are able to cause significant price changes on Bitcoin & rest cryptos prices.