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WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

04/05/2020

 

General Comment

Higher volatility we saw at the markets last week, with a series of announcements and with hopeful messages regarding the coronavirus cure. There are many voices that warn for an upcoming storm and other voices, more calm voices, mention that the market lows have already taken place. Oil prices found support around $8 and everybody is waiting the NFPs on Friday for April with existing estimations for an Unemployment Rate at 14%. A possible revival of the trade war between USA and China will affect the fragile balance in a very negative manner while the markets sooner or later will assess the future impacts of the coronavirus on the global economies.

 

EURUSD

Clearly bullish reaction for EURUSD last week, since the pair from 1.0821, managed to breakout the psychological resistance of 1.10 and finally closed at 1.0979. Some clouds of a new trade war between USA and China are gathering since president Trump blames China for the coronavirus pandemic. On the other hand, Europe has serious issues: Lagarde’s speech on Thursday did not please the markets as the predictions are for a GDP recession up to 12%. EURUSD is ahead of a critical crossroad. A breakout of 1.10 will trigger a bullish trend with next target the price of 1.1140 but as long as the pair remains below 1.10, the sellers who are looking to 1.0840 may dominate again. By preferring the second option, we are sellers this week.

 

GBPUSD

Bullish was the last week for GBPUSD with weekly open at 1.2360 and a weekly close at 1.2492. On Thursday, after the weakness of USD, the pair surpassed 1.25 but the Friday’s correction confirmed that this milestone price is a hard resistance. Despite Boris Johnson’s statements that coronavirus pandemic had performed its peak already, GBP did not have the necessary strength to breakout 1.25. This psychological price level will be critical in the next days since a solid breakout will make the price area of 1.2770 visible but on the contrary, staying below 1.25 triggers sellers with target 1.23. We’ll try the second option and we will open sell positions this week.

 

USDJPY

USDJPY continued its downtrend with a weekly close at 106.90 without a remarkable volatility increase. The yield of the 10-year US bond stays almost unchanged in the last period and currently it is close to 0.62%. JPY has lost a lot of its safe haven asset power but still it is in a better shape and if we see a solid bearish breakout of 106.60, we will open sell positions because in such a case the downtrend is confirmed even more.

 

EURJPY

Bullish was the trend for EURJPY last week (from 116.31 it closed to 117.36) with the most important rise to take place on Thursday, during Lagarde’s speech. This reaction was a bit too much since on Friday we saw consolidative tendencies and early this week we see strong pressures. The downtrend that has started from the beginning of the year has not been affected seriously so we insist on sell positions.

 

EURGBP

Continuation of the uptrend for EURGBP which opened at 0.8742 and closed at 0.8784. Many analysts have a view for a price of 0.90 in the next weeks and by taking into account that the price area of 0.87 is a strong support for the pair, we’ll try buy positions.

 

USDCAD

For USDCAD it was a week with ordinary volatility but open/close prices almost the same at 1.4087. It was the results of the drop of the pair in the beginning of the week and a strong uptrend after last Thursday. The Canadian economy faces serious problems due to low oil prices and due to important issues of the banks. The rise of the pair is more likely and if there is a solid breakout of 1.42, we may have a clear uptrend with target much higher levels. We’ll try buy positions for the current week and we’re keen to increase the size above 1.42.

 

USDCHF

Strongly bearish week we saw for USDCHF since the weekly close at 0.9613 took back all the rise of the last two weeks. Last Thursday was the heaviest bearish day but as we’ve mentioned, the pair is oscillating around 0.97 during the last period and maybe will do the same this week as well. Range strategy positions is our selection.

 

AUDUSD

Positive was the last week for AUDUSD with a weekly close at 0.6415. The rise was very heavy until early Thursday (weekly high at 0.6570) but then a downtrend started to press the pair. Early this Monday, we saw the announcement for the new Building Permits in Australia with much better than expected results (-4% vs -15%) but the weakness of the Chinese currency, carries away AUD with pressures as well. Many serious analysts claim that the successful managements of the coronavirus pandemic in Australia (low number of cases & deaths) has already absorbed in the price of AUDUSD and from now on, ahead of a new trade war between USA and China we may see heavy pressures on the pair. We’ll open sell positions this week, targeting the price area of 0.6280.

 

SP500

Marginally bearish was the last week for SP500, with a weekly close at 2,819 points and loss like 0.35%. The important thing to mention is that until last Wednesday the Index had a strong uptrend and it surpassed the resistance at 2,950 points but from Thursday and on, we say heavy pressures that has the aforementioned result. There are many voices that claim that the rise of the last weeks was rather extreme and we may see strong corrections since there are already many liquidations, especially in most affected sections of the US economy. Bullish reactions may occur from possible positive news regarding the coronavirus cure like it happened with Gilead and its positive report for Remdesivir medicine last week. In any case, we favor short positions for the current week.

 

DAX30

Bullish was the week for DAX30 with weekly close at 10,835 points and profits more than 3.7%. There’s a probability for the German stock market to get affected by the general negative outlook so by expecting corrective movements, we’ll try short positions this week. Bullish reactions may occur after possible positive news for the pandemic treatment.

 

FTSE100

FTSE100 managed to close lower last week with a weekly close price at 5,731 points and loss close to 0.8%. We say “manage” because until last Thursday the Index had remarkable profits and weekly high at 6,190 points but after that, we saw very strong pressures. Maybe these pressures can carry on this week too, so we’ll open short positions unless we’ll have positive news regarding the coronavirus medicine.

 

Gold

Bearish was the last week for gold prices with a weekly close at $1,710 and losses around 2%. The gathering clouds of a new trade war between USA and China increase the geopolitical risk and most of the times, gold is favoured from such phenomena.Also, we need to keep in mind that the price area of $1,743 has been confirmed as a strong resistance and that there is a certain volatility decrease the last weeks. The average true range has dropped more than 50% in the last month. Our selection is the long direction for the upcoming week.

 

US Oil

After the oil price collapse during the last weeks, we saw a calm week with low volatility. The spot close price was at $8.27 with profits like 4%. Many serious analysts predict that the oil price recovery may take many years. The truth is that as long as the transport industry is hit and as long as the oil storage issue (that caused the negative oil futures prices) remains, we cannot talk about a solid price recovery. The demand has been dropped by 30M barrels which is almost 3 times the production cut that OPEC announced. Bullish reactions may occur but the probability of a heavy uptrend is not high. Also, there is a high probability for profit takings in the oil futures of June because investors would not like to be in trouble with negative prices again. We’ll try some low-risk short positions this week.

 

Bitcoin

Last week, we saw the biggest rise of the last months for Bitcoin price since from $7,709, it closed on Sunday at $8,916 with profits like 15.6%. The halving that will take place at 11.5 (every 10 minutes the number of produced Bitcoins will fall from 12.5 to 6.25) and the relative supply decline, pushes the price higher but we should keep in mind that after the markets consume the halving effect we may see pressures on the prices again. It is also important that Bitcoin could not manage to stabilize above the milestone price of $9,000 and early this week is moving towards $8,600. With every reservation, we prefer short direction this week.

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