The recent agreement in EU was very important and a very critical factor for the EUR rising. On the contrary, USD dropped at two years low prices, in between the tension and the increased number of cases of the COVID-19 and in between the recent conflicts between USA and China. The weakness of USD is something that seems to comfort all sides at this moment, both the developed and the emerging markets and it is expected to carry on unless something changes in the global scene dramatically. The stock markets had rather consolidative movements with ups and downs during the week, gold had an explosively profitable week and there were also profits in the oil prices. This week, the important event is the FED session but there are other important announcements as well such as the Unemployment Rate in German and EU and the GDP in Germany, EU and USA. The three major factors that affect the markets in this period are: news & updates regarding COVID-19, the geopolitical tensions and the monetary policy of the central banks.
EURUSD (Euro vs US Dollar)
High profits for EURUSD last week. The pair opened at 1.1411and closed at 1.1655 since there was an agreement between the member of the EU, after 4 days of negotiations. It was a very major moment in the history of EU, the agreement includes a package of 750 bn euros, 390 bn in grants and 360 bn in loans. On the contrary, USD sunk (USD Index dropped to its lowest levels since the autumn of 2018), clearly affected by the recent tension between USA and China in Hong Kong and from the increased number of COVID_19 cases. This is week there is the FED session in USA for the Interest Rates and the Monetary Policy but it seems that the pair is travelling for higher levels. Many analysts mention prices like 1.1750 or even close to 1.20 in a longer term, so buy positions is our selection for this week.
GBPUSD (Great Britain Pound – US Dollar)
Important rise for GBPUSD last week. The pair opened at 1.2546 and ended the week very close to 1.28 with the major cause the weakness of USD since according to some officers’ statements, there is a long distance to be covered for a deal between EU and UK regarding Brexit. Early this week, USD is sinking even more so the pair has broken the critical resistance of 1.2813 and it is moving to 1.30. Given that a no-deal Brexit has a bigger probability now and by keeping in mind the very recent decision by Boris Johnson for putting in quarantine the British citizens who return from Spain, a possible USD recovery may cause strong corrections for the pair. We will wait for bearish signals before we open sell positions this week.
USDJPY (US Dollar – Japanese Yen)
Bearish was the last week for USDJPY, which opened at 107.07 and closed last Friday at 106.12. The 10 years US yield dropped to 0.58% but JPY seems to retrieve its safe haven asset characteristics. The support of 106 does not exist anymore and maybe the pair will put to the test the more long-term support of 104.50. We will try sell positions under this consideration.
EURJPY (Euro – Japanese Yen)
The great momentum that EUR has taken recently, overrode the temporary JPY strength so the pair had a clear bullish movement with a weekly open price at 122 and a weekly close price at 123.69. The resistance of 124.40 still stands since there is battle between two strong currencies at this stage: EUR and JPY. A possible break-out of 124.40 may cause more bullish trends for the pair and the very next resistance is at 127. Buy positions is what we’ll do this week.
EURGBP (Euro – Great Britain Pound)
Bullish was the last week for EURGBP which opened at 0.9083 and closed at 0.9110. Given the EUR strength due to the recent agreement in EU a breakout of 0.92 is possible enough and we may see even higher price levels. In the long-term, the momentum of EUR and the weakness of UK economy may lead the pair even to a 1:1 relationship. We will open buy positions this week.
USDCAD (US Dollar – Canadian Dollar)
Important drop for USDCAD last week since the pair opened at 1.3568 and closed at 1.3421. The obvious USD weakness due to the global concerns about the relationship between USA and China and the higher numbers in COVID-19 cases, develop a downtrend for USDCAD and the price area of 1.3315 is very important because if the price falls below this level, we may see prices even close to 1.30. There is also a case that the pair may have a bullish reaction, by returning to 1.3650, so we’ll take the risk of opening buy positions.
USDCHF (US Dollar – Swiss Franc)
After four bearish weeks for USDCHF, there was the last week which was bearish but with even bigger tension. The pair opened at 0.9387 and dropped at 0.9205 by the end of the week and currently it is moving at 0.92. The price area of 0.9170 – 0.9180 is a very critical support so we may see the activation of some buyers that will cause a recovery. We’ll take the risk with buy positions this week.
AUDUSD (Australian Dollar – US Dollar)
The Australian currency was also took advantage from the USD weakness so AUDUSD opened at 0.6985 and closed the week at 0.7106. A very big factor for this is also the recent rally in gold prices but the concerns caused by the conflict between USA and China may rein back the pair. A bullish breakout of 0.72 will strengthen the scenario of a new uptrend but there is always the case of USD recovery (FED on Wednesday may be a good reason for that) which will mean that we may see pressures on the pair to the price area of 0.70. Buy positions is our selection for the current week.
Slightly bearish was the last week for SP500 which closed at 3,203 points and losses about 0.35%. During the last two weeks, the Index has difficulties to clearly surpass the level of 3,200 points since the geopolitical concerns and the increased number of COVID-19 cases slow down the bulls. In the current week we expect many big companies results to be released, such as Amazon, Apple, Facebook etc and this will be a barometer for the Index. A possible bearish breakout of the 3,200 points will be a negative message and it may lead to a further correction. We will follow this scenario by opening short positions below 3,200 points.
Bearish was the last week for DAX30 which closed at 12,815 points and losses like 1%. This drop took place by the end of last week since in the beginning there was a bullish trend. It was the first correction after three profitable weeks in a row but there are concerns because the Index could not keep the 13,000 points and it may trigger further corrections. Of course, the European and the German stock markets have more attractive valuations than the US ones, especially after the recent EU agreement so we may see increased investments in the European stocks from global investing assets. We may try some short-term selling positions this week though.
It was a strongly bearish week for FTSE100 since it closed at 6,077 points and losses close to 3%. During the last six weeks there is obviously no trend for the Index which moves between 6,000 and 6,300 points. We need to see more updates and news for a trend but there are concerns because the Index approaches the support of 6,000 points. The UK economy has a long way to go before it can get over the issues and it may cause troubles in the UK stock markets. Short positions is our selection for one more week.
An explosive rally took place for gold last week, with a weekly close price at $1,900 and profits that touched 5%. The more impressive thing is that the current week opened much higher and currently the gold is trading at $1,970! The record price of the 9/2011 has fallen as it seems the huge liquidity, especially from FED and all this money supply push the investors to buy gold. Now only the take profit actions are able to stop this rally and the only visible resistance is the psychological level of $2,000. We will open long positions for one more week.
The spot price of oil, closed last week above $20, confirming the recovery after the recent shock. The futures price though, closed at $41.30 with profits circa 1.8%. There are voices around, claiming that the world economy recovery may delay so the oil demand recovery may delay as well. The news from COVID-19 and the geopolitical tension will dominate the facts this week and a possible breakout above $41.60 may cause an uptrend outlook. We will try long positions this week.
Important profits for Bitcoin last week which managed to exceed for the first time after the beginning of June the very critical threshold of $10,000. more specifically, the weekly close price was at $9,945 and the profits were like 8% but we saw during the week, price even close to $10,200. Currently, Bitcoin is having more profits and it is moving above $10,200 but it will take a confirmation above $10,500 so we can have an idea of a solid uptrend. The current price levels are very important because the majority of long-term Bitcoin owners have bought it very close to it and the balance between profitable and lossy investors depends a lot from the fluctuation around $10,000. We cannot exclude the case that Bitcoin has entered into a new sideways movement channel so we will wait for the confirmation above $10,500 before we become buyers.