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WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

01/06/2020

 

 

General Comment

The recent agreement in Europe regarding the support package of 750 bn had a positive impact on EUR which have risen importantly. On the other side, USD weakened a lot to all of its currency pairs. Stock markets keep on rallying and now the prices have reached the levels that used to be before the coronavirus crisis. As per the new USA – China tension, on Friday president Trump calmed down the markets by lowering the profile which gave extra breaths to the investors. The current week has many & critical economic news and announcements such as the Unemployment Rate in USA which may approach 20% according to many analysts. The relieving rally of the markets may have absorbed all the positive updates regarding coronavirus pandemic and USAChina trade war but a possible political instability ahead of US election in November may increase the market volatility.

 

EURUSD

A very profitable week for EURUSD with the pair opening at the area of 1.09 and closing on Friday, a bit above 1.11. The recent European agreement for a support package of 750 bn has created serious expectations and a wind of optimism in Europe. This Monday is a public holiday for many European countries (Germany, France, Switzerland) as a Whit Monday but the rest of the week contains very important news such as PMIs, Unemployment Rate in Germany, Interest Rates decision in Europe and above all, the NFPs and the US Unemployment Rate. EURUSD is in an uptrend because traders & investors are in a risk-on mood and that weakens USD which considered to be more risk-off trading asset. The price area of 1.1170 – 1.1180 is a strong resistance for the pair and a possible bullish breakout may define a new solid and long-term uptrend for the pair, so buy positions is our selection for this week.

 

GBPUSD

Strongly bullish was the last week for GBPUSD with a weekly open at 1.2175 and a weekly close at 1.2356. It was the 2nd in a row bullish week for the pair after the bottom price at 1.2075, more intensive and early this week we see a further rise to the price area of 1.24. There is a partial lockdown release in UK this week while some negotiations regarding Brexit may start again. The price area at 1.25 is the next bet for the pair because it will bring it back to the pre-crisis orbit. We’ll try buy positions this week, with our eyes on 1.25.

 

USDJPY

It was a slightly bullish week for USDJPY. The pair opened at 107.58 and closed at 107.78 but we need to spot the fact that it was the 3rd in a row bullish week, in an opposite direction of the other USD pairs. USDJPY keeps on having low volatility without being able to escape above 108.35 or below 106.45 during the last weeks. It is a battle between the two most safe and riskoff currency assets: USD and JPY. This squeeze thought will lead to an explosion at some stage but there is no clear direction so far. We’ll take some low-risk sell positions, thinking that we’re close at the upper band of the aforementioned price channel

 

EURJPY

Important profits performed EURJPY for one more week with an open price at 117.22 and close at 119.71, approaching the critical price area of 120. We see a solid & developed uptrend during the last month which started from 114.40. If this trend carries on, we’ll see EURJPY at the price areas of the beginning of the year, close to 122 so our selection for this week is buy positions.

 

EURGBP

Another bullish week for (3rd in a row) which brought it very close to the critical resistance of 0.90. Last Friday was heavily bullish and the pair reached 0.9055 but very quickly there were serious pressures that brought it back below 0.90 and this fact creates some concerns. Some traders consider the price area of 0.90 as the price center of the pair this period and since both EUR and GBP are getting stronger, we need to see which will be strengthen more so we can have a solid trend. We’ll stay out this week because there is an uptrend but as long as the price remains below 0.90, there must be corrective movements.

 

USDCAD

Important drop for USDCAD last week with an open price at 1.3991 and a close price at 1.3768. The rise of the oil prices and the Canadian GDP which had a better price than the expected one, boosted CAD which managed to breakout the support of 1.39. Now there is a high probability for the pair to approach the next support at 1.36 so we’ll try sell positions this week.

 

USDCHF

It was a bearish week for USDCHF which opened at 0.9711 and closed at 0.9611 without escaping though below 0.96 which would increase the probability of a downtrend. As long as the pair remains into the tight channel between 0.96 and 0.9750, it is still moving around its center of 0.97 in a sideways movement. There must be a solid breakout (either up or down) in order to have things changed so we’ll wait for such an event. Just because we’re very close to 0.96, if a breakout occurs, most likely it will be a bearish one so we’ll favour sell positions this week.

 

AUDUSD

Heavily bullish week for AUDUSD which opened at 0.6535 and closed at 0.6667. Early this week the pair is moving significantly above 0.67 and it seems that the uptrend is solid and active. Australian manufacturing PMI in May, announced at 44 and the Chinese Caixin PMI recovered above 50 so AUD was boosted and further expectations have been developed. Of course, there is the big issue of the latest tensions between USA and China but the markets do not measure a high risk on this so far, so we’ll open buy positions this week.

 

SP500

Another bullish week for SP500 which exceeded 3,000 points, by closing at 3,057 points and weekly performance close to 3.4%. This furious rally has leaded SP500 to the price area of the last February before the big drop from the coronavirus pandemic. The huge market liquidity, in combination with the very low bank & bonds Interest Rates drive many investors to the stock markets. During the last two months, we had only three slightly bearish weeks while all the rest were clearly bullish. The uptrend is undoubtable but it does not mean that we can exclude corrections, especially in the of a possible USA – China trade war reignition. Since trend is our friend, we’ll keep on being buyers on SP500 this week.

 

DAX30

Strongly bullish week for DAX30 which closed at 11,672 points, having performed profits of 5%. Early this Monday, the futures of the Index perform profits too and it seems that the markets are looking to the next technical resistance which is at the price area of 12,260 points. This price area will be our major target for our long positions this week.

 

FTSE100

Bullish was the last week for FTSE100 with a weekly close at 6,098 points and profits circa 1.5%. By the end of last week, we saw corrective tendencies so the profits were limited since on Thursday the Index touched 6,300 points. Traders & investors support this market as well by considering that some stocks may be undervalued. We’ll open long positions this week.

 

Gold

Marginally bearish was the last week for gold which closed at $1,743 with profits like 0.4%. The gold price will be affected a lot from geopolitical developments and the important economic announcements of the week, mostly in Europe (Interest Rates) and USA (Unemployment Rate & NFPs). This week so far, gold keeps on rising and it is currently moving above $1,750 where an important resistance stands. Solid prices above $1,760 may open the road for even higher levels but there is always the case of a risk-on mood that may move the investors away from gold. In the case of prices above $1,760, we’ll try long positions but below $1,750 we may try short positions.

 

US Oil

Another bullish week, the 5th in a row, for oil prices. Spot price of oil closed last Friday at $12.63, performing profit close to 9%. With some relieving statements of president Trump regarding the recent USA – China tensions and a possible agreement between the OPEC countries along Russia for a production cut extension, oil prices have a steady rise, having a performance monthly record that we saw last time, back in 1999. Despite the incriminations, no economy takes advantage from high tensions this period so most likely we will witness a geostrategic calm down that will affect positively the oil price even more. Given the above, we prefer long positions for one more week.

 

Bitcoin

Strongly bullish was the last week for Bitcoin which closed at $9,446 with profits close to 8.5%. The most important cryptocurrency in the world that has almost the 66% of all the cryptocurrencies capitalization, is moving the last weeks into a tight range between $8,700 and $9,700, with no clear trend. This price area is very important because a possible solid bullish or bearish breakout, may define the trend for the next period. We will wait for a such a breakout and we may open positions to both directions, according to the breakout.

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