Home Markets WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

18/05/2020

 

General Comment

The negative economic news barrage that show the size of the results of the coronavirus pandemic on the global economies, carries on. All economies are sinking into recession but USD is getting stronger mostly because Jerome Powel of FED rejected the markets fears for negative interest rates and because Donald Trump in an interview at Fox Business Networks Mornings claimed that “it’s a great time to have a strong dollar”. The stock markets dropped but gold and oil had important earnings. This week is dominated by the central banks’ sessions and announcements in USA and Europe as well as by the new economic news for April and May which will show even more the damage that has been caused from the lockdown.

 

EURUSD

Marginally bearish was the last week for EURUSD with a weekly close at 1.0816 just 9 pips below the weekly open. It is the usual channel between 1.08 and 1.10 that the pair is moving during the last weeks. The statements from Powell and Trump maybe will strengthen USD which was already strong since it is considered to be a safer investing choice, comparing to the unstable EUR. From next Tuesday and on there is a barrage of economic news and announcements that will affect the pair very much but most likely the strong USD will cause pressures on the EURUSD pair so we’ll open sell positions this week, targeting the price area of 1.07.

 

GBPUSD

Strong pressures for GBP we saw last week and the pair GBPUSD closed at 1.21, importantly lower from the weekly open of 1.2405. The negotiations between UK and EU which take place in the background of the coronavirus scene do not seem to have positive progress as officers from both sides confess and of course the impact in the UK economy from the pandemic is very strong with the extended lockdown. Moreover, according to chief economist Andrew Haldane from BoE, the possibility of negative rates cannot be excluded. If these rumours affect the markets then the pair is traveling to even lower levels so we’ll favour sell positions this week with a first target the psychological support of 1.20.

 

USDJPY

Bullish week for USDJPY with a weekly open at 106.46 and a weekly close at 107.09, that gave an end to the mini downtrend rally that started from the mid-April. The perception of the investing safety that JPY offers also comes to an end since all the statements converge to a strong USD. Early this morning, the Japanese Q1 2020 GDP announced at -0.9% (better than expected) but the pair does not react at the reasonable degree. A bullish breakout of 108 will strengthen even more a possible uptrend so we’ll try buy positions this week.

 

EURJPY

The bullish reaction of EURJPY last week with a weekly close at 115.87 should be considered rather as a corrective reaction. The downtrend of the pair that started from the beginning of the year has not been broken from this correction and we expect for the pair to try the 3.5 years old support of 114.40 this week. According to this outlook, we prefer sell positions this week.

 

EURGBP

Strongly bullish was the last week for EURGBP with a weekly open at 0.87 and a weekly close at 0.8937 while in parallel we saw importantly higher volatility that caused a breakout of the last weeks’ channel. Now the next target of the buyers is the round price of 0.90 and by following it, we’ll open buy positions as well.

 

USDCAD

It was a clearly bullish week for USDCAD which opened at 1.3930 and closed at 1.4108, with bullish days, except last Thursday. CAD could not take advantage from the rising oil prices which shows the strength of USD currency. Despite all these, the pair has not escaped from the usual price channel of the last weeks. It takes a bullish breakout of 1.4170 or a bearish breakout of 1.39 and by favoring the first option we remain buyers on the pair.

 

USDCHF

USDCHF keeps on moving close to its balance price of the last weeks, around 0.97. Last week the pair closed at 0.9715, just 2 pips below the weekly open and the low/high prices were at 0.9665 and 0.9755 respectively. We need to see if the recent statements about a strong USD would be a catalyst for an uptrend and a bullish breakout but in any case, we’ll try buy positions this week, targeting the price area of 0.9850 in the first place.

 

AUDUSD

Bearish week for AUDUSD with open price at 0.6531 and close price at 0.6414, giving an end to an uptrend rally of five weeks. The economic news from Australia were negative and the Chinese ones rather mixed. Of course, there is a threat for a new trade war between USA and China but there must be a solid bearish breakout of 0.64 in order to have a clear downtrend. The strong USD as well as the rising commodities prices confirm a bearish scenario for the pair so we’ll prefer sell positions for the current week.

 

SP500

Bearish week for SP500 which closed at 2,854 points and losses more than 2.5%. The pandemic impacts on the economy and the strong offered liquidity keep the Index in a balance between 2,800 and 2,900 points. The futures of the Index though are profitable early this week. With strong pressures on the real economy, the reasonable reaction is a bearish trend but keeping in mind the uptrend really of the last two months we cannot exclude a direction to the 2,950 again. Low-risk and opportunistic trades to both long and short directions is our selection this week.

 

DAX30

We had the first solid bearish week for DAX30 since the mid-March period. The close price was at 10,526 points and the weekly losses were close to 3.5%. Even if the futures early this week are in profit, we will try short positions with main target the support at 10,400 points.

 

FTSE100

It was a bearish week for FTSE100 which closed at 5,828 points with losses above 1%. Now the options are obvious: either the Index will breakout the resistance of 6,000 points and we’ll have a clear uptrend either we’ll have a breakout of the 5,650-support level and we’ll witness a downtrend. By trusting the 2nd scenario, we’ll open short positions this week.

 

Gold

Strong profits for the gold last week, which closed at $1,753.4, 2.7% higher than the weekly open. Early this Monday the rally carries on and gold is moving above $1,770. It is indeed the era of safety and riskaverse for the investors so gold is favoured. Other reasons for high gold prices have to do with low interest rates and consecutive QEs that devalue the currencies and give higher value to gold. According to all these, we’ll open long positions with main target the price area of $1,800.

 

US Oil

It was the 3rd in a row bullish week for oil and the spot price had a weekly close at $10.14 and profits close to 6%. The futures contracts of the next months had important price rise as well and despite the low demand of the last months there are some developments that justify the profits of the last 3 weeks. China seems to be the first country that the demand shows signs of demand recovery and the announcements from USA also show a slight de-escalation of the oil stocks. Currently, the oil prices are rising even more, above $10.50 but it takes a lot of attention since the coronavirus issues are still there and the worst impacts are ahead for the global economies. We’ll try short positions if only we see a bearish movement.

 

Bitcoin

It was a strongly bullish week for Bitcoin that closed at $9,665 with profits above 10%. The last Monday’s halving and the lower price of each new Bitcoin affected the price. Currently, there’s a battle for $10,000 which will fulfill with optimism the crypto buyers & investors but we should not forget that the euphoria, caused by the halving is not based in real and fundamental reasons. Of course, the momentum is bullish, of course the price of $10,000 is a realistic target but a strong correction won’t surprise us. If we see a weakness of earning the $10,000 level, we’ll try short positions.

Leave a Reply