The story of V recovery faltered last week and especially at Friday’s markets close where the fears for a coronavirus inflame was obvious. There are many new cases all over the world with more than 340,000 new ones during the last weekend while the 25% of it were in USA. Also, it’s important that president Trump announced new tariffs in Europe & UK and Christine Lagarde at her speech on Thursday, underlined that the current crisis is worse than the crisis of 2008 and the recovery would be a complicated matter. This week, beyond the coronavirus developments, it’s interesting to watch the announcements of the Q1 2020 UK GDP, the Caixin PMI in China, the Unemployment Rate in Germany and above all, the Unemployment Rate in USA with analysts to expect a small decline. All the investors eyes are turned on the coronavirus cases numbers and especially the numbers that come from USA.
Slightly bullish was the last week for EURUSD with open price at 1.1182 and close price at 1.1218. The pair’s outlook was mixed though: the first two days were bullish, the next two were bearish and Friday was consolidative with low volatility. The pair is moving into a tight channel during the last days and we expect to see if the current week’s announcements are able to move it either below the support of 1.1170 either above 1.13. In mid-to-long-term view though, we believe that the USD weakness will become bigger. Range strategies is our selection for this week.
Consolidative was the last week for GBPUSD and the pair had the rare case of closing almost at its opening price, at 1.2335. The conversations – negotiations regarding Brexit continue and Boris Johnson is ready to announce a new task force which will accelerate he delivery of big UK projects such as schools, hospitals, roads and jails. The downtrend of the pair is very likely and maybe it can lead it to the price area of 1.21 which is the main target for our sell positions this week. A possible positive development in Brexit talks though may strengthen GBP and GBPUSD.
Marginally bullish week for USDJPY which opened at 106.78 and closed at 107.20. Marginally higher is also moving the 10 years US treasury yield at 0.64% (which always has a high correlation with USDJPY) while earlier in the current week we had the announcement of the Japanese retail sales of the May, at the disappointing -12.3%. Both USD and JPY as risk–off selections attract the traders at this stage, so we see consolidative movements and low volatility on the pair. With some exceptional tails, the range of the pair is very tight, between 106.70 and 107.50 and it takes a solid breakout of the channel for a possible trend definition. Range strategy seems like a good selection for the current week.
It was a bullish week for EURJPY after two bearish weeks before. The pair opened at 119.36 and closed at 120.26, above the psychological level of 120. This case, creates new expectancies for a recovery to the price area of 121.50 but the fundamentals outlook and the risk-off mood may bring the pair below 120 again. We’ll try buy positions but in case of dropping below 120, we’ll turn it to sells.
Another bullish week for EURGBP which closed at 0.9093, solidly above the milestone price of 0.90. There is an obvious uptrend since last April with basic driver the weak GBP and our next target for our buy positions is the price area of 0.92.
Slightly bullish week for USDCAD since it opened at 1.3613 and closed at 1.3687. The oil price decline that we saw recently along with the strong USD as a risk-off selection, boosts the pair higher and the next resistance is close to 1.3750. There is also the option that the uptrend of the last weeks may lead to corrections to the price area of 1.35 so below 1.3650 we will try sell positions.
Sideways to bearish was the last week for USDCHF which opened at 0.9510 and closed on Friday at 0.9482. Two clear risk-off selections such as USD and CHF create a balance on the pair with low volatility and consolidations. The price area of 0.95 seems like a good balance point for range strategies this week.
Last week was consolidative for AUDUSD with some marginal bullish trends. The pair closed at 0.6864 about 55 pips higher than the Monday’s open price. This pair is also moving into a tight channel between 0.68 and 0.6950 but the current week contains important news & announcements for USA, China and Australia which may increase the volatility. Given the risk aversion through the investors (at least for the moment), a bearish breakout has a higher probability so we’ll favor sell positions this week.
A week of a small correction we saw for SP500 with a weekly close price at 3,002 points and a loss of 1.8%. There are certain concerns in the markets due to increased coronavirus cases but the huge liquidity and the rally that is taking place since the end of March, create conditions of a party that investors don’t want to miss out. Of course, the fundamentals and the macros are not too bright and a possible bearish breakout of 3,000 points may trigger a downtrend mood. On the contrary, an approaching of 3,120 points again may fill the traders with optimism. We’ll try short positions below 3,000 points but if we see up trending mood, we’ll keep our long positions.
Marginally bearish week for DAX30 which closed at 12,046 points with losses a bit above 1%. The Index in in the verge of 12,000 points and such a bearish breakout may sharp the correction. Keeping this in mind, we will open short positions below 12,000 points.
Bearish was the last week for FTSE100 with a weekly close price at 6,104 points, about 1.5% lower. Given the increasing distance of the month’s highest price at 6,500 points, an approach of the 6,000 points and furthermore a bearish breakout of this level, will give heavy downtrend characteristics to the Index so under the aforementioned circumstances, we’ll open short positions.
It was the 3rd in a row profitable week for gold which managed to close at $1,784, about 1.6% higher. The important thing is that the price had a breakout of the resistance at $1,760 and now it is very close to break the 8 years old high price, close to $1,800. The fears that come from the increasing coronavirus cases and the concerns of a second lockdown, push many investors to the safe-haven asset of gold. There is always the case of taking profit and liquidation in case of a stocks market breakdown so it can be supported but the level of $1,800 is now a realistic target and we may open long positions with our eyes on it.
Bullish week for oil prices since the spot price closed on Friday at $15.83, performing profits around 1.65%. After last Tuesday though and after the weekly highs at $16.78 we saw strong corrective tendencies. There are concerns for a new lower demand due to the increased coronavirus cases and due to a possible new lockdown. The inventories in USA after last Wednesday’s announcement are 1.44M barrels higher which also a case of low demand. The correction so far is into the limits of a healthy uptrend but a further drop of the spot price, below $15 will increase the probability of a downtrend channel. Below $16 we’re keen to open short positions but in case of prices above $16,80 we will open long positions.
Bearish enough was the last week for Bitcoin which closed at $9.118, having losses like 1.7%. From one side, the support of $8,700 is still standing but on the other side, it was the 3rd in a row bearish week. The Israeli ClearSky, a software security company announced that there is a probability that $200M have been lost due to hacker groups, since 2018. The most important and dominant crypto has obvious signs of weakness, it does not seem to be able to surpass the price of $10,000 (which is a psychological level of many crypto traders) and furthermore, it keeps on approaching the support of $8,700. Short is our selection for the current week.