27/04/2020
General Comment
The current week contains many & important macroeconomic announcements, mostly from Europe, USA and Japan (Interest Rates, Unemployment Rate, GDP etc) that will show the results and the degree of affection of the coronavirus pandemic to the world economies. Also, many companies will announce the Q1 results this week. We expect to see a higher volatility compared to last week’s very low volatility.
EURUSD
Second in a row bearish week for EURUSD which closed at 1.0820, 50 pips lower than the weekly open. Last Friday was a bullish day so the loss of the pair limited since during the week we saw a low price at 1.0727. The economic indexes that had been announced are in unprecedented levels but it seems that US economy is in a better shape. Also, the Eurozone conflict between North and South countries, regarding the support measures still stands. Having in mind the weak EUR, we’ll try sell positions for one more week, looking to the support of 1.07. Of course, the week is very unstable because there may announcements or interferences from the central banks that may cause game changers
GBPUSD
Bearish was the last week for GBPUSD, with a weekly open at 1.2492 and a weekly close at 1.2362 after the disappointing results of the UK economy. Moreover, the Brexit negotiations, according to some officers’ statements are not in the best shape. The fact is that the pair has not escaped too far from the centre price of the last month and that means that there is no confirmed trend. Maybe the return of Boris Johnson will cause a temporary optimism and a GBP boost but the pair’s outlook favours sideways movements, maybe marginally bearish ones. We’ll try some low-risk sell positions this week.
USDJPY
Very low volatility on USDJPY the last weeks but even lower at the last week which had a weekly range of 75 pips only. The weekly close was at 107.43 which was very close to the weekly open price. JPY has lost a lot of a safe–haven asset profile, into a situation which is new for everybody. It’s obvious that the pair does not have a confirmed trend since it is oscillating around 107 – 108 but it’s more possible to see a bearish mood in the next days, so we’ll favour sell positions. Of course, the important news ahead may change the outlook by increasing the volatility as well.
EURJPY
EURJPY keeps on dropping, reaching last week the price area of 115.40. After that there was a slight recovery on Friday and the weekly close was at 116.29. The usual conflict issues in Eurozone do not open a window for recovery so most likely the downtrend will carry on. Also, a possible price correction may strengthen JPY so we’ll open sell positions for one more week.
EURGBP
We saw a bullish reaction at EURGBP, after 4 bearish weeks. The weekly close was at 0.8749, 50 pips above the weekly open. Given that this rise took place mostly in the beginning of last week, with well-known Eurozone issues and a possible GBP recovery, we may see a downtrend continuation for the pair so we’ll open sell positions, targeting the price area of 0.86.
USDCAD
Bullish week for USDCAD, with a weekly open at 1.4013, a weekly close at 1.4092 and volatility quite lower compared to the last two weeks. The very low oil prices, will affect for sure the Canadian economy, which is much correlated with oil but on the other hand the pair has tried several times to breakout the price of 1.42 without success. Also, in long term period the problems of the Canadian banks and the need for extra liquidity on the Canadian economy may lead the pair above 1.55. The outlook is indeed bullish but the current week may have surprises due to many economic announcements. Possible extra oil production cut may boost CAD temporarily but the uptrend seems as the dominating scenario. Buy positions is our selection for the current week, with main target the price area of 1.42.
USDCHF
It was a clearly bullish week for USDCHF which closed at 0.9726 even if during last week it conquered the milestone of 0.98. As long as the pair is moving away from, the probability of the uptrend gets more points so we’ll try buy positions, targeting 0.9850. Possible interferences from central banks may change things at any time.
AUDUSD
Last week started bearishly for AUDUSD but very quickly the pair reacted by taking back the losses. The week closed with marginal profits and a close price at the area of 0.64. The limited cases and the small number of deaths from coronavirus in Australia (just 83 deaths in total) in combination with the positive outlook in China, give a boost to the pair which is in an uptrend since mid-March. The pair seems ready to try the price area of 0.66 and we’ll follow this scenario by opening buy positions.
SP500
Slightly corrective week for SP500 which closed at 2,829 points with losses circa 1.3%. The drop in the beginning of last week brought the Index to the area of 2,730 points but in the following days we saw strong recovery trends and the conclusion is that it keeps its uptrend momentum. Early this week. the futures are moving profitably but we should pay special attention because the results announcements of the Q1 of many big US companies may affect negatively the Index, in case of strong sales decline. We prefer long but low-risk positions this week but if we see really bad Q1 results we’ll turn them to short with bigger size.
DAX30
Bearish was the last week for DAX30 with a weekly close at 10,446 points and losses like 2.4%. This price correction does not seem to have affected the uptrend of the Index seriously and a possible exceed of 10,700 will confirm it more. We remain in the long direction.
FTSE100
Rather neutral week for FTSE100 which closed at 5,777 points and losses close to 0.5%. Profitable are the futures early this morning and if there is a bullish breakout of 5,930 points (which is 1.5 months high), we may see even more profits.
Gold
Importantly profitable week for gold since the Friday’s close price was above $1,745 which means a performance of 3%. The gold gives the usual signs of the safe–haven asset, even if it has ups and downs often. The ongoing liquidity injections from central banks, favour gold prices. The trend is bullish and we expect to see, after a clear breakout of $1,750, prices close to $1,800. We are buyers this week.
US Oil
In the centre of the world’s eyes are the oil prices since we had the chance to see significantly negative prices in the May’s futures market. In the spot market, the drop was huge with a weekly close at $7.95 and weekly loss more than 50%! This drop took place mainly in the very first two days of the previous week and in the following days we saw consolidative trends around $8. The huge demand decline is verified because the transports (which are the biggest oil consumers) are still frozen. There are some recovery hopes if the rumours for new production cuts from OPEC come true. Also, the confirmation of the Trump’s threats for shooting the Iranian gunboats in case of approaching US vessels again may cause a price relief too. Keeping those things in mind, we’ll try some low-risk long positions this week.
Bitcoin
Strongly bullish week for Bitcoin which had a good performance of 8% and a weekly close price at $7,700. The expected halving at 11/5 which will cut the supply, pushes the prices to the bull direction, even if this rise is not as strong as in the previous times. Moreover, the correlation between Bitcoin and SP500 is in all time high levels at the price of 0.17 (in the scale of -1 to 1) which means that the crypto markets take their positions along with the rest asset classes without being a clearly alternative investing solution. However, until halving we expect to see an extra boost at Bitcoin, above $8,000, even close to $9,000, so we’ll open long positions for this week.