USD dropped last week, in relation with all the other basic currencies. The predictions of FED regarding US economy are in a better shape but there was no reference for a new QE expansion and this fact disappointed the investors. Also, new tensions between USA and China rise on the horizon as the US government ordered Google and Apple to exclude the Chinese TikTok and We Chat from their platforms. The other Central Banks did not change the monetary policy and there were only some references for negative rates in UK and this had as a result the short-term GBP drop. The major stock markets were bullish, gold was slightly bullish and finally, oil had important profits.
This week will be dominated by the speeches of Jerome Powell as he testifies in the Congress as well as the PMIs of the world’s biggest economies that will give signs about the economic sentiment.
EURUSD (Euro vs US Dollar)
EURUSD had consolidative movements for a second week in a row, opening and closing around the area of 1.1835 – 1.1840. It seems that the pair has found a temporary balance at this price range but to the south there is the support at 1.1750 while higher there is the resistance at 1.1910. Possible breakouts of the above levels will define the trend of EURUSD in the next period of time, either as a downtrend or as an uptrend by approaching 1.20 again. The COVID-19 updateσ, the new tensions between USA and China and the scheduled economic announcements of the week will define which of the two scenarios may take place. We cannot exclude the sideways movement as well but most of the times the low volatility ends with a price explosion. We prefer buy positions on EURUSD this week.
GBPUSD (Great Britain Pound – US Dollar)
We saw a bullish reaction for GBPUSD last week, after the big drop so the pair opened at 1.2710 and closed on Friday at 1.2916. There is no serious progress regarding Brexit, even if there were some encouraging statements, mostly from the president of the European Commission Ursula von der Leyen. There are also voices and rumours about a new measures and local lockdowns in front of the second wave of COVID-19 but since the USD weakness leaves gives more credits to a further bullish reaction, we’re keen to open buy positions this week.
USDJPY (US Dollar – Japanese Yen)
Important drop for USDJPY last week. The pair opened at 106.09 and closed at 104.56 since USD appeared weak and the JPY strong enough due to risk aversion sentiment. The US 10 years treasury yield is moving marginally higher at 0.70% but the strong JPY presses the pair. USDJPY is in a downtrend definitely but we should not forget that the price area of 104.10 is a strong & important support as it is a multi-month low. It’s not easy to go long into such a downtrend so we’ll keep on being sellers but we mat try some low-risk opportunistic buy positions if we see reactions above 104.10.
EURJPY (Euro – Japanese Yen)
EURJPY performed its biggest drop of the last weeks, opening at 125.57 and closing at 123.82. The support at 124.50 had an easy breakout and as long as the risk aversion sentiment remains, we may see attempts of approaching the price zone of 122.90. Trusting this fact, we’ll try some sell positions in the current week.
EURGBP (Euro – Great Britain Pound)
Bearish was the last week for EURGBP, correcting the huge rise that had took place. Starting at 0.9260 on Monday, the pair closed on Friday at 0.9165, mostly due to strong GBP. In case of good news in the Brexit issue, we may see GBP even stronger and the pair is able to breakout 0.9150, looking at lower levels. Sell positions is our selection for this week.
USDCAD (US Dollar – Canadian Dollar)
It was the second week in a row that USDCAD had a bullish reaction, as it opened at 1.3175 and closed at 1.3205. USD remains weak, the oil prices (that are correlated in a high degree with CAD) seem to recover the pair possibly will turn bearish this week. Important factor on this, is the breakout or not of the critical support at 1.3130. We prefer sell positions this week.
USDCHF (US Dollar – Swiss Franc)
Bullish was the last week for USDCHF, by closing at 0.9112, having started from 0.9077. The weak USD presses the pair and if there will be a bearish breakout of 0.91, then there is a high probability of re-approaching the levels of 0.90 again. Sell positions is a good option for us this week.
AUDUSD (Australian Dollar – US Dollar)
It was another consolidative and low volatility week for AUDUSD which opened at 0.7276 and closed at 0.7291. The upcoming tensions between USA and China do not affect AUD so far which is also favoured by the higher commodity prices, mostly from gold. The jobs market in Australia was impressively good despite the lockdown in Victoria so there is a fresh air of optimism for the Australian economy that could create conditions for further bulls on AUDUSD. The resistance of 0.74 could be a good target for our buy positions.
The losses on SP500 carried on for a 3rd week in a row, as the Index closed at 3,315 points, about 0.66% lower. It is obvious that the investors are disappointed due to no decision so far for an economic aid package from FED. The critical price zone is around 3,280 points because below that level, the probability for a strong downtrend is higher. The speeches of Jerome Powell and his testimony in front of Congress are considered very important because the sentiment and the outlook of the Index may change to any direction. Having in mind the latest behaviour of SP500, we’ll try short positions this week.
Bearish was the last week for DAX30, which closed at 13,099 points and losses like 0.63%. It is positive that the Index could keep the 13,000 points but the sentiments of the markets in the current period is negative. Important factor for the near future of the Index is the stay or not above 13,000 points but our selection for this week is short positions.
Lossy week for FTSE100, which closed at 5,969 points, having performed losses, more than 1%. The Index lost the important level of 6,000 points and in combination with the Brexit stagnation and with the second wave of COVID-19 all over the island, we may see further losses. We will try short positions this week as well.
It was another week with marginal profits for gold since it closed at $1,956.5, having performed profits like 0.44%. The risk aversion mood amongst the investors and the USD weakness, favour the gold prices. With slow but steady steps, gold approaches the milestone price level of $2,000 and if things remain the same, this scenario is favoured. It will get stronger if gold is able to breakout the resistance of $1,982 but there could be a bearish turn if the price drops below $1,938 or even more, below $1,911. Some low-risk long positions is a good option for us in the current week.
It was a strong recovery week for oil prices, since the oil futures closed at $40.94 with profits more than 9.5%. This rise was unexpected because nothing could incline towards something like this in the beginning of the week. Hurricane Sally enforced some oil companies to stay closed last week and OPEC with some official statements, asked its members for a better compliance regarding the production cuts that have been decided. On the other hand, the demand is still limited because of COVID-19 and some certain concerns for a second lockdown do not leave a serious window for further oil recovery. We’ll try short positions this week.
Last week was bullish for Bitcoin with a weekly close price at $10,923 and profits above 5.5%. Bitcoin shows some recovery signs but it takes a bullish breakout of $11,190 in order to have a solid uptrend view. On the contrary, a possible drop below $10,750 could weaken such an uptrend. On the long term, there is a positive view amongst the cryptocurrency investment community but on a weekly basis the failure of staying above $11,000 creates some concerns and we may see corrective movements before the big rise. It’s time to stay out, waiting for further updates.