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WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)

WEEKLY NEWSLETTER (FX-INDICES-COMMODITIES)
by admin

08/06/2020

 

General Comment

Two major & positive surprises took place in the last week: the unexpected good news from the US jobs market in May and the big extension of the EU support package that will finally be 1,35 trillion euros. These facts increased the investorsrisk-on mood (which was already visible from the beginning of the week) and caused the strength of EUR, GBP and USD mostly on Friday. Also, oil prices performed profits and safehaven assets like gold and JPY dropped. The current week contains important economic news as well such as the Q1 2020 GDP announcement in Eurozone, Fed Interest Rates and FOMC and April GDP in UK. Most likely, the risk mood will stay this week as well but some big funds have started to build hedging positions through the derivative markets.

 

EURUSD

Strongly bullish week for EURUSD (the 3rd in a row bullish week) with open price at 1.1116 and close at 1.1291. During the week though, the pair reached the price area of 1.14 but the strength of USD, mostly on Friday through the unexpected good news of NFPs and Unemployment Rate in USA, limited the bulls. The EU economic support package was a catalyst for EURUSD because 3 weeks ago the pair was in the price area of 1.08. Both EUR and USD seem strong so we expect a wrestle between those two major currencies. Technically speaking, there is an important resistance at 1.1350 and an important support at 1.1130. Since many market analysts predict prices like 1.15 very soon, we will wait for a reasonable price correction before we open buy positions.

 

GBPUSD

Very strongly bullish was GBPUSD which opened the week from 1.2323 and closed at 1.2667. The Brexit negotiations didn’t have any significant progress but the risk-on mood strengthens GBP. Important and reliable analysts predict prices even close to 1.35 in the next months but for the moment, the next resistance is at 1.2750 which is our major target for our buy positions this week. GBPUSD has stronger probability for an uptrend after the bullish breakout of 1.26 last week and the bullish breakout of 1.27 early this week.

 

USDJPY

Important profits for USDJPY last week, since the pair opened at 107.68 the it approached the milestone price of 110 and finally closed a bit lower at 109.59. The euphoria amongst the investors, the support packages & huge liquidity and the 10 years US bond yield which climbed at 0.90% give more credits to USD and weaken JPY which has a safe-haven asset outlook. On the other hand, there is the important and hard resistance of 110 but a possible breakout may lead to prices like 112. On the bearish side there is the support of 109.20 because we cannot exclude any possible corrections after the rally. We will wait for a solid breakout of 110 and we’ll try buy positions.

 

EURJPY

Very important rise for EURJPY which started the week from 119.74, it surpassed easily the resistance of 122.40 and finally closed at 123.73. The strong EUR in combination with the weak JPY has the result of this clear uptrend that started about one month ago from the price area of 115. the pair is looking now to 125 but it takes a lot of attention because after rallies there are profit taking effects. In any case, we remain buyers at the pair.

 

EURGBP

Bearish was the last week for EURGBP since the great strength of GBP dominated on the strong EUR. From the price area of 0.90, the week closed at 0.8913 and the strong outlook of GBP may push the pair even lower. Sell positions is our selection for the current week.

 

USDCAD

The drop of USDCAD carried on significantly last week since the pair opened at 1.3776 and closed at 1.3421. Now there is a visible approach of the 1.3320 support which may be the last step before 1.30 if of course the downtrend persists. The oil prices keep on rising, boosting CAD but we also see a strong USD so we favour the recovery instead of a further drop and we’ll open buy positions this week.

 

USDCHF

Slightly bullish was the last week for USDCHF which closed at 0.9623, about 30 pips above the weekly open. The temporary downtrend below 0.97 may change since USD is getting stronger so we will try buy positions this week

 

AUDUSD

Very important profits performed AUDUSD last week with a weekly open at 0.6657 and a weekly close a bit below of 0.70 at 0.6969. The economic results from China were positive but mostly the riskon mood favours AUD and causes buying positions. In this uptrend, the most important hurdle is the resistance of 0.70 but USD seems strong enough too so the uptrend may end soon. Most of the times, before a milestone price breakout there is an important correction so we’ll try sell positions this week.

 

SP500

Rally without end for SP500 which closed at 3,185 points and profits more than 4%. The investors’s euphoria was cumulative upon the huge markets liquidity and in combination with the impressive come back of the US jobs market, had a very positive result. Aspects such as the protests & the damages and in the rest of the world and the USA – China tensions do not worry the markets for the moment and now the all-time highs of last February, before the coronavirus crisis are visible. Of course, in such a fragile environment there is a strong probability for corrections and big funds hedge their positions by buying put options. We remain buyers for one more week.

 

DAX30

One of the most important bullish weeks of the last period, we saw for DAX30 which closed at 12,766 points, performing profits more than 9%. The stock markets are in the middle of a bullish rally and it’s difficult to be against the mainstream. The next important resistance is at 13,250 points and this will be the main target for our long positions.

 

FTSE100

Important profits for FTSE100 last week with a weekly close at 6,451 points, with a rise more than 6%. The support of stock markets worldwide is obvious but many investors may take the profit. The uptrend is very strong so we’ll favor long positions for one more week.

 

Gold

Bearish was the last week for gold which closed at $1,688, about 3% lower. The risk-on mood keeps the investors away from gold which of course has characteristics of a safe-haven asset. It’s very important that gold lost the milestone price of $1,700. Close to $1,685 though there is a strong support and maybe we’ll see gold prices to oscillate between $1,685 and $1,700 before a further drop. We will open short positions this week when we see a certain bearish momentum.

 

US Oil

The rise of the oil prices continues. The spot price had a close price last week at $14.29 having profits that exceeded 13%. Russia and OPEC countries agreed to a production cut extension and the demand also recovers day by day, after the lockdown ending in many countries. These facts, combined with the very low oil prices that we saw in mid-March, make the probability of a further rise even stronger so we will open long positions in the current week.

 

Bitcoin

It was a bullish week for Bitcoin which closed at $9,750 and profits above 3% but this had to do mainly with the important rise of last Monday. Last Tuesday we saw a big drop and the rest of the days until Sunday (cryptocurrencies markets are open during the weekends) were rather consolidative. The target of $10,000 has not achieved yet since every attempt is following by strong pressures and sales. On the other hand, Bitcoin is very resilient to prices below $9,500 so we expect a price explosion at some stage due to squeeze and to low volatility. We’re keen to be buyers above $10,000 but we will short Bitcoin after a solid bearish breakout of $,9500.

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