14/09/2020
General Comment
USD was strengthened for a second week in a row while in Europe, ECB left the Interest Rates unchanged as it was expected. Furthermore, Christine Lagarde gave optimism waves regarding the European economy, underlying that the strong EUR lately is not a source of concerns. The US stock markets had another corrective week on the contrary with the European ones that had significant profits. Gold had rather consolidative trends but oil had a very bearish week.
The current week contains a lot of market news, including the important FED session for the Interest Rates and the US Monetary Policy.
EURUSD (Euro vs US Dollar)
Consolidative was the last week for EURUSD since in the first half of the week was bearish but later on it strengthened. The pair opened and close at 1.1845, having weekly lows at 1.1753 and weekly highs at 1.1917 that took place after Lagarde’s statements that the strong EUR is not a concern issue. EURUSD is flirting lately with 1.20 and if USD gets weak then there is a strong achievement probability. There is a case for high volatility after the middle of the week, mostly due to FOMC and other important announcements such as the Industrial Production and the Retail Sales in USA. We remain buyers for one more week on EURUSD.
GBPUSD (Great Britain Pound – US Dollar)
Extremely bearish week for GBPUSD which opened at 1.3249 and closed at 1.2794, having lost 450 pips. The strong USD but above all, the fear scenario in UK regarding Brexit, contributed to this outlook. Boris Johnson the Internal Market Bill to the British parliament so there is a now a possibility for a change to the Withdrawal Agreement. The European reaction was immediate with threats for legal actions. The current week contains a series of important news for the economy in UK (Inflation, Interest Rates, Retail Sales, Industrial Production) but the dominating factor will be Brexit again. We may see the pair even lower (unless there will be relieving news) so we favor sell positions.
USDJPY (US Dollar – Japanese Yen)
Consolidative tendencies for USDJPY last week with a weekly open and close at the 106.15 – 106.20 price area. The US 10-year Treasury Yield stays close to 0.67% favoring this consolidation outlook and Shinzo Abe is still Japan’s Prime Minister while there is a delay for his replacement. USDJPY is moving around 106 for many weeks and it’s possible to carry on this behavior, unless something significantly unexpected happens. Range strategies around 106 is our selection for this week.
EURJPY (Euro – Japanese Yen)
Consolidations on EURJPY as well. The pair opened and closed the week at the 125.75 – 125.85 price area. There is an obvious uptrend since mid-May but the resistance of 127 seems inventible for the moment, despite some strong attempts during the last weeks. We remain buyers.
EURGBP (Euro – Great Britain Pound)
Important rise for EURGBP last week with a weekly open at 0.8928 and a weekly close at 0.9257 since EUR was strong enough and GBP collapsed after the latest Brexit updates. The pair in short-term terms is in overbought conditions but as long as the Brexit chaos remains, the bulls are favoured. We’ll open buy positions, targeting the resistance at 0.9320. In any reversal Brexit news, our positions will close.
USDCAD (US Dollar – Canadian Dollar)
After eight weeks in a row, we saw a bullish reaction for USDCAD which opened at 1.3062 and closed at 1.3176, in between of a strong USD and big drop in oil prices. If the oil prices stabilize and/or USD gets weak again then the downtrend will return for the pair. Trusting this scenario, we are keen to open sell positions this week.
USDCHF (US Dollar – Swiss Franc)
Slightly bearish was the last week for USDCHF, which opened at 0.9118 and closed at 0.9088. It took place after USD short-term strength and this fact does not leave many thoughts for an uptrend. The pair will most likely test the price area of 0.90 again so sell positions is our option for the current week.
AUDUSD (Australian Dollar – US Dollar)
Low volatility and consolidations took place last week for AUDUSD which opened at 0.7283, near enough to its open price. There is a pause to the uptrend, at the price area of 0.73 but up to now there are no visible signs for a trend reversal. Gold does not drop, China is in a peaceful and quiet mode with the West and in case of a weak USD again, AUDUSD may try the yearly highs above 0.74. Trusting this case, we prefer buy positions this week.
SP500
Second in a row corrective week for SP500 which closed at 3,337 points and losses close to 2.3%. The long-term uptrend outlook has not been changed so far even if there are several and certain risks such as the lower fiscal package of financial aid, the US elections in November and of course the COVID-19 increased cases worldwide. If the Index is able to stay above 3,300 points, then the recovery probability is high. Long positions is our selection for this week.
DAX30
It was a clearly bullish week for DAX30, which had a weekly close at 13.181 points and managed to perform profits more than 1.6%. There was a preference in between the investors to the European stocks this week and the Index remains above 13,000 points, giving extra smiles and high probability for approaching the multi-month high price, above 13,450 points. Long positions is our selection for this week.
FTSE100
Strong recovery week for FTSE100 which closed above 6,000 points (weekly close at 6,031 points) and profits that touched 3.5%. Many investors and analyst are more optimistic after this fact so we’ll open long positions, targeting the price area close to the resistance of 6,250 points.
Gold
Marginally bullish was gold during last week with a weekly close at $1,948 and profits like 0.4%. During the last month, the volatility is low and there is a price stabilization around $1,950. The target of $2,000 is still on though. We need to pay special attention to the FED session on Wednesday since the US Monetary Policy affects gold strongly. Long positions is our selection for one more week.
US Oil
It was the second in a row strongly bearish week for oil futures with a weekly close price at $37.34 and losses close to 5.5%. The main reasons for that are the discounted prices that Saudi Arabia offers, the rise of the US oil inventories and the global concerns for the economic recovery due to COVID-19. If there are not technical wise correction or profit taking to the short investors, sellers will dominate again so we’ll try short positions, targeting the price area close to the critical support at $36.10.
Bitcoin
After the big drop, it came a consolidative week for which closed at $10,335 having performed small profits like 0.7%. In any case, the fact that Bitcoin stays above $10,000 is an encouraging factor that a downtrend has not been developed so far, even if the volatility was very low last week for this asset. The high inflation that is going to appear to the plain currencies in the next period favour the cryptos and as long as Bitcoin is above $10,000, there may be new buyers (including us) that will raise the price.