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WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

25/05/2020

 

General Comment

Last week passed by with a mixed outlook and low volatility in FX markets while the Stock markets kept on rallying for one more week. Gold had some corrective movements and oil prices performed an important rise. In the current week there is absence of important economic news & announcements so the trends of the markets will be defined by the updates in the coronavirus pandemics as well as any fresh news from the new tension and the imminent trade war between USA and China. This Monday is a public holiday in USA & UK and we may see even lower volatility.

 

EURUSD

Bullish was the last week for EURUSD which started from the price area of 1.08 and closed a bit above 1.09. Last Thursday though, the price exceeded 1.10 but right away we saw strong pressures so the pair returned back to lower levels. There is an obvious riskoff mood due to a new emerging trade war between USA and China. Also, there are some dark clouds gathering in the FrenchGerman agreement of last week, regarding a support package of 500 bn since some northern countries do not agree and in the same time, they suggest a new loan contract along with a budgetary discipline. Just a few important economic news this week but it seems that EURUSD has been trapped in a tight range between 1.08 and 1.10 and it takes a solid breakout, either up or down for confirming a new trend. Taking into account possible bad news from Europe, we’ll open sell positions this week.

 

GBPUSD

We saw a slight bullish reaction for GBPUSD last week so the pair from the open price of 1.2083, closed at 1.2165. GBP though still has serious issues since the Brexit negotiations seem frozen and even if UK lately has a declining number of new coronavirus cases, still the economy has serious problems. Finally, there are rumours that are not refuted that (at least for the moment) regarding negative interest rates from BoE. We may see more pressures on the pair so we’ll open sell positions this week, targeting the milestone price of 1.20.

 

USDJPY

Marginally bullish was the last week for USDJPY, with a weekly open at 107.08 and a weekly close at 107.60. Both USD and JPY are considered to be safe-haven assets nowadays (each one for different reasons) so we witness this low volatility attitude and consolidations. Bank of Japan announced new support package of $700 bn so we may see the pair moving higher in the next days. First target for our buy positions is the resistance of 108.40.

 

EURJPY

Strong profits for EURJPY last week since the pair opened at 115.85 and closed on Friday at 117.34. On Thursday, the pair was moving even above 118.50 but now it is a critical crossroad and very soon we will know if the correction of the last two weeks will carry on by targeting a trend reversal or it is temporary and EURJPY will return back to its downtrend. Sell positions is our selection for the current week.

 

EURGBP

Second week in a row with profits for EURGBP but in a smaller degree. The weekly open was at 0.8932 and the weekly close at 0.8961. On Thursday, the pair touched the milestone price of 0.90 but very quickly we saw heavy pressures that caused a drop from this area. Given the GBP weakness, we may see new breakout attempts of 0.90 so we’ll try buy positions. We should keep in mind though that negative developments in Europe, regarding the support packages may change the outlook of the pair.

 

USDCAD

Bearish was the last week for USDCAD with a weekly open at 1.4091 and a weekly close above the psychological support of 1.40. Since the end of March, markets evaluate the price level of 1.40 as a balance level even if there’s a possible trade war between USA and China, even if there are big oil prices changes and even if the economy and the bank of Canada have serious issues. It means that we expect a strong movement to a certain direction in order to have a clear and solid trend. Range strategies will be our selection for this week.

 

USDCHF

USDCHF is another pair that is moving around a balance price level in the last weeks. USDCHF had the same attitude for the second week in a row: open & close price near 0.97 and low volatility. Both USD and CHF are low-risk solutions for the investors so we’re waiting for any updated that can signal a new trend for the pair. Traders may have more reasons in trusting USD in the next period so we prefer buy positions this week.

 

AUDUSD

Bullish was the last week for AUDUSD which opened at 0.6417 and finally closed at 0.6535. There is no important news this week in Australia and China so the pair is going to be affected in a great degree by the tension between USA and China. A possible worsening of their relationship will affect the pair negatively and we should keep in mind that AUDUSD is in a bullish rally since the end of March, starting from the price area of 0.58 so many traders may take the profits. We’ll try sell positions this week and we’re keen to close them, at the price area of 0.64.

 

SP500

A new bullish week passed by for SP500 with a weekly close at 2,956 points and profits circa 3.6%. There’s a huge liquidity in the markets due to continuous support packages and QEs from FED so the Index is approaching the psychological resistance of 3,000 points which will be a very critical price for its future trend. News & updates regarding new possible medicine & vaccine against coronavirus as well as the new tension round between USA and China will dominate the markets this week. We’re expecting to see corrective pressures as the Index approaches the 3,000 points so we’ll try short positions.

 

DAX30

Strongly bullish week for DAX30 which closed at 11,120 points and profits more than 5.5%. The uptrend that has been developed in the last period seems to carry on and 11,500 points looks like a realistic target. On the other hand, this fragile economic landscape may lead to strong corrections so we prefer short positions this week.

 

FTSE100

Bullish was the last week for FTSE100 which closed at 6,010 points and profits above 3%. The general atmosphere in the stock markets was positive during last week and the weekly close above 6,000 points is definitely an encouraging sign. On the other hand, though, we must pay special attention because the economic problems caused by the coronavirus pandemic are still here and we cannot exclude the option of strong corrections. By trusting this option, we prefer short positions for the current week.

 

Gold

It was a corrective week for gold which closed at $1,735.6 and losses like 1%. There is a riskoff mood amongst the investors and as it is usual in such cases, gold prices are moving higher but we remain sceptical because the uptrend is not as strong as it had to be. Early this week the gold is moving even lower and currently the prices are below $1,730. While the general sense of the market is that gold is still the safest haven asset in the world, we may see in the short-term more corrections that is why we’ll take short positions this week.

 

US Oil

It was the fourth in a row bullish week for oil and the spot oil price closed at $11.60 with profits that surpassed 14%. The economies that are released from coronavirus lockdown create expectations for higher demand but the new crisis between USA and China brings up concerns. The US inventories dropped for the second week while the active rigs in USA keep on decreasing too for the tenth week in a row. The questions if the increasing demand will cause a new oil prices rise or if the worsening USA – China relationships will push many investors in selling actions and liquidations. By believing that the oil prices have been overbought lately, we’ll try some short positions for the current week.

 

Bitcoin

Strongly bearish was the last week for Bitcoin that took back all the profits of the previous week. More specifically, Bitcoin closed the week at $8,719 with losses that touched 10%. Last week, many sellers appeared and there were rumours that even the Bitcoin inventor provided selling transactions too. Also, by the end of last week, someone transferred 46,835 Bitcoins of $431M in an unknown destination and after this fact became public, many new sellers appeared by believing that it was a big exchange or a custodian. Since the price level of $8,600 is very critical, we’ll open sell positions this week because a possible breakout may cause even lower prices.

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