12/10/2020
General Comment
President Trump appeared in a good health after his recent COVID-19 disease and last week closed along with some positive news regarding the new US stimulus package. This had as a result the drop of USD and the risk-on mood amongst the investors. EUR and GBP had important profits while JPY had losses as it is considered to be a safe-haven asset.
The stock markets had important profits as well in both USA and Europe along with gold and oil that performed also important profits.
The current week begins with a USA public holiday (Columbus Day) but it will be dominated by events and announcements such as Lagarde’s speech, Consumer Index Price in Germany, USA and China and by the end of the week, US Retail Sales, the European Council Meeting and the Presidential debate in USA.
EURUSD (Euro vs US Dollar)
Strongly bullish was the last week for EURUSD as it opened at 1.1711 and closed at 1.1830. The upcoming new US stimulus package weakened USD and strengthened currencies such as EUR which attracts the investors’ interest in a risk-on mood. This week may have high volatility due to fundamentals and events such as Lagarde’s speech on Wednesday and the European Council Meeting on Thursday and Friday. The pair has characteristics of an uptrend and a possible bullish breakout of 1.19 may open the road for the price area of 1.20, that we saw again in the beginning of last September on EURUSD. We prefer buy positions, according to this analysis.
GBPUSD (Great Britain Pound – US Dollar)
Although there was no serious development on Brexit and although there are statements in UK about differences on important issues, GBPUSD had profits by starting from 1.2933 before it closes on Friday at 1.3045. USD appeared weak and the economic announcements in UK had a rather neutral reaction from the markets. This week there is the speech of Bailey on Monday and the Unemployment Rate announcement on Tuesday and along with Brexit updates, these would be the dominating factors. The bullish breakout of 1.30 though, opens an optimism window for even higher prices and since the next important resistance exists at 1.3270, we’ll try some buy positions this week.
USDJPY (US Dollar – Japanese Yen)
Slightly bullish week for USDJPY (open price at 105.28 – close price at 105.59) because although USD was weak, JPY was also weak in a risk-on mood environment. The US 10 years treasury yield keeps on rising and it is currently moving at 0.78%. Although the pair broke out temporarily the strong resistance of 105.80, could not carry on with a further rise so most likely it will keep on moving into the tight price channel. We’d better stay out this week.
EURJPY (Euro – Japanese Yen)
It was a week of a great rise for EURJPY, which opened at 123.34 and closed at 124.92. Traditionally, EUR is a risk-on option as distinct from JPY which is a safer selection. Since the end of September, the pair has entered in an uptrend channel and most likely, it may lead EURJPY to the price area of 126 – 127 again. Under these circumstances, we will open buy positions this week.
EURGBP (Euro – Great Britain Pound)
Consolidative trends we saw for EURGBP last week. Both EUR and GBP were strong. The open price was at 0.9053 and the close price at 0.9066 but we need to underline that during the week we saw prices up to 0.9160. This week, amid possible Brexit updated and due to the European Council Meeting may cause high volatility for the pair but since the price insists above 0.90, bearish probability is limited, so we prefer buy positions.
USDCAD (US Dollar – Canadian Dollar)
Big losses for USDCAD last week, with an open weekly price at 1.3295 and a close weekly price at 1.3117. The weak USD in combination with the higher oil prices brought this result but the Canadian economy shows some recovery signs as well, as the Unemployment Rate, dropped to 9%. Given the weakness of USD the pair is approaching to 1.30 again but in these levels the probability of a bullish reaction is higher so we’ll wait and see by staying out this week.
USDCHF (US Dollar – Swiss Franc)
Another bearish week for USDCHF which opened at 0.9193 and closed at 0.9094 (about 100 pips lower). The downtrend may have issues at the support of 0.9050 and even more at 0.90 but since the CHF is considered to be a risk-off selection, we cannot exclude a bullish reaction, up to the price area of 0.92. In a bearish market, we prefer sell positions though.
AUDUSD (Australian Dollar – US Dollar)
It was the second in a row strongly bullish week for AUDUSD which opened at 0.7165 and closed at 0.7240. The losses of USD, combined with the higher commodities prices (especially gold prices) boosted the pair higher. The “hurdles” for the uptrend are the resistances at 0.7280 and 0.7350 but we should keep our eyes to the Unemployment Rate announcement and the Consumer Price announcement, both on Thursday. The market is clearly bullish, so we’ll open buy positions.
SP500
Explosive rise for SP500 last week since it closed at 3,477 points with profits that touched 4%. The new US stimulus package approached more through the statements of Trump and other US officials but as we’re moving closer to the US elections, things may become unpredictable. The republicans are traditionally more market friendly but we have seen several times positive reaction from the markets with democrats as well because they may announce higher taxes but this fact comes along with higher spending and fiscal. Now the stock investors are able to look higher and the all-time highs of the last August are clearly visible. We don’t exclude corrective movements since things are a bit fragile but, in any case, our selection for the week is to open long positions.
DAX30
Bullish was the last week for DAX30, which closed at 13,039 points, performing profits like 2.75%. There is a global euphoria in the markets and a risk–on mood but the bullish breakout of 13,000 points gives extra motivation to the buyers and the multi-month high prices of the last August at the price area of 13,500 points seems like a good case for them. We’ll keep on being buyers as well.
FTSE100
It was a second in a row week with bullish reaction for FTSE100, which closed at 5,976 points, having profits close to 1.7%. Generally, the mood is good but there are two main concerns: FTSE underperforms regarding the other main stock indices and there is an obvious problem of breaking out the milestone price of 6,000 points. Technically, the Index has a slight bearish slope since the beginning of June so we won’t take any risks this week.
Gold
Profitable for the second week in a row was gold, by closing at $1,935 about 1.7% higher. The weak USD and the upcoming stimulus package in USA helped gold price a lot to climb higher. The news regarding the stimulus package and all the updates around the US elections will be stronger influencers for gold in the next period of time. A possible counterweight bay be the investors’ selection to more risky assets but since gold approaches more and more the price area of $2,000, opening long positions is an obvious option for us.
US Oil
Importantly bullish week took place for oil prices. The futures of the Black Gold closed at $40.51 with profits more than 9.5%. There was a certain improvement of the investors’ sentiment as well as a relief after the recent Delta hurricane in USA. Also, we had the important strike in the oil industry in Norway which threatened the Norwegian production but it is already over. On Tuesday there is the World Energy Outlook and on Wednesday the monthly Oil Market Report which will give both signs to the oil markets but some reasons that caused the big rise (strike in Norway, hurricane), are now over so there are serious doubts if the bulls can carry on. Most likely, we will see consolidative tendences around $40 or maybe some slight bearish movements, so short positions seems like a better option for us this week.
Bitcoin
Very important profits for Bitcoin last week, as it managed to close at $11,373, about 6.5% higher. The Square Inc., company of financial services that is led by Twitter, recently bought $50M in Bitcoins and this fact filled with optimism the cryptos community. Moreover, the new stimulus package in USA favors investments solutions with no inflation, such as Bitcoin. The mood and the sentiment are both positive so the price area of $12,000 is a realistic target for our long positions.