With the election of Joe Biden, the US elections thriller came to an end, even if Donald Trump at his recent post, keeps on doubting on the result. On the other hand, regarding the COVID-19 huge issue, the second wave that expands in Europe and USA is finally stronger than the expectations with increased numbers of new cases and deaths, despite the lockdowns in most of the countries. Beyond any doubts though, the most important new of the last week, took place on Monday. Pfizer announced the impressive 90% effectiveness on the vaccine and the attitude of the markets changed rapidly even if during the week, it dampened in some degree. US dollar was very strong until last Wednesday, then it started to drop but finally, the week stayed positive. Stock markets were profitable this week too, same as the oil but gold as expected (due to increased mood for risk and due to strong USD) had some losses.
The current week does not contain very important scheduled economic announcements & events with the exception of G20 and the Interest Rates in China but it is very possible that the new US president to set the tone in the US economic policy. A bigger Quantitative Easing and a fiscal expansion will offer bigger hopes in the markets and will possibly drop USD even more while it may help the emerging markets to take deep breaths.
Until then, markets will move between the concerns and fears of COVID-19 and the hopes for the new vaccines.
EURUSD (Euro vs US Dollar)
Mildly bearish was the last week for EURUSD, with a weekly open at 1.1888 and weekly close at 1.1835. The very first days of the week were very bearish due to the great strength of USD but from last Thursday and on, we saw bullish reactions but, in any case, the sum of the week was bearish. Most of the European countries are in lockdown, the numbers of the new cases & deaths are shocking so we’re in a balance of fear and optimism as there are encouraging news from the new vaccine from Pfizer. The pair needs a clear bullish breakout above 1.1920 in order to have solid hopes for 1.20 again but a possible bearish breakout of 1.1745 would trigger as the most likely scenario, a downtrend. We’re keen to open both buy & sell positions according to the aforementioned levels.
GBPUSD (Great Britain Pound – US Dollar)
Marginally bullish week for GBPUSD which opened at 1.3158 and closed at 1.32. UK has serious issues with COVID-19 while in Brexit, negotiations postponed for the current week since there was no serious progress during last week. Ireland claimed that if UK passes the Internal Market Bill (which will define the trading relationships) then an agreement will be out of scope. These news do not let the pair to expand fully its uptrend momentum, which takes place since the end of September. On Tuesday there is the speech of Bailey (Bank of England) and on Wednesday the Inflation announcement but any positive news regarding Brexit could cause high volatility at any time. Technically speaking, a bullish breakout above 1.3320 will give a green light for re-approaching of 1.35 and a bearish breakout below 1.31, may put the price area of 1.30 to the test again. We’ll try buy positions this week.
USDJPY (US Dollar – Japanese Yen)
It was a clearly bullish week for USDJPY which opened at 103.31 and closed at 104.61. The 10-year US treasury yield moved higher and it is currently moving close to 0.89%. Of course, the Pfizer’s announcement regarding the vaccine on Monday, reverted the bearish momentum of the pair but it has not reverted yet the long-term downtrend that started early last summer. After the Monday’s enthusiasm, USDJPY dropped below 105 again and it may try the support at 104, so sell positions is our option for this week.
EURJPY (Euro – Japanese Yen)
Bullish week for EURJPY, which started from 122.82 and ended the week at 123.81. The whole rise is rendered on Monday’s big bullish movement (due to vaccine news) but the rest of the days were bearish. It seems that the price area of 125 is a strong resistance for EURJPY so the bears may carry on below 123.65, with next target the 123. We’ll keep opening sell positions.
EURGBP (Euro – Great Britain Pound)
It was a bearish week for EURGBP which opened at 0.9029 and closed at 0.8965, losing on a weekly basis the critical price of 0.90. The outlook of the pair is bearish and a possible drop may be intensified more, below 0.8865 but in between the final Brexit negotiations, anything may occur. We’d better stay out this week on this pair.
USDCAD (US Dollar – Canadian Dollar)
Bullish was the last week for USDCAD, even if reached on Monday a low price that we had not seen since the autumn of 2018. The weekly open was at 1.3038 and the weekly close at 1.3130 as after the mid-week, the oil price started to drop. As long as the oil price keeps on dropping and if USD gets stronger then we may see attempts for recovery at the 1.3250 which is an important resistance area at this period. Prices below 1.31 and especially below 1.3080 give a tone to the pair’s sellers to hunt the target of 1.30. We prefer buy positions though.
USDCHF (US Dollar – Swiss Franc)
Strongly bullish week for USDCHF which opened at 0.8985 and closed at 0.9125. The recovery of 0.90 is considered to be critical as well as the recovery of 0.91. The truth is that after last Thursday, the pair had strong pressures again and maybe it will face 0.90 again, especially if it drops below 0.9080. An approach of 0.92 may show that the rise of the last week was not accidental but believing in weak USD, we’ll try sell positions this week.
AUDUSD (Australian Dollar – US Dollar)
It was a rather neutral week with low volatility for AUDUSD since both open and close prices were around the price area of 0.7270 – 0.7275. The pair did not have the same behaviour as the rest currency pairs that contain USD because both Australia and China are countries that seem to recover from COVID-19 pandemic so AUD was strong enough. There are critical announcements for Australia and China within the week and if the pair surpasses 0.7340, the multi-year high of 0.7415 may be in target. On the contrary, price below 0.7220 would be a short-term signal for a return to downtrend. Buy positions is our selection for this week.
Bullish was the last week for SP500 with a weekly close price at 3,582 points and profits above 2%, breaking during the week the previous all-time high price at 3,586 points. The futures of the Index, early this week, are already moving above 3,600 points as there is optimism that the COVID-19 vaccines will give an end to the pandemic. Also, the package of the economic aid in USA is still expected and since it will offer fresh and new money in the markets, the stock Indices may be favoured even more. Of course, the problems did not disappear from one day to the other so despite the strong uptrend of SP500, we won’t be surprised by seeing corrections to the price area of 3,500 points. In any case, we’ll open long positions this week.
Important profits for DAX30 last week. The Index managed to exceed 13,000 points and it closed at 13,117 points, about 5% higher. DAX30 has approached the very difficult resistance of 13,460 points and maybe there this obvious uptrend could take a stand or it could have a correction. Until then, we’ll keep on opening long positions.
Last week FTSE100 closed with a weekly percentage rise that we had not seen for many months. It broke out easily the area of 6,000 points by closing at 6,322 points and impressive profits that touched 7.50%. UK keeps on having serious lockdown and Brexit issues but the 8.5 months high at 6,510 points seems to be “threatened”. We’ll open long positions this week.
Bearish was the last week for gold with close price at $1,888 and losses like 3.30%. Obviously, the risk-on mood dominated amongst the investors since the news regarding the vaccine gave fresh hopes. The strengthening of USD had a critical role as well. The risk-on/off mood and the performance of USD affect gold price in great degree and so if we see prices above $1,900 it will possibly mean that uptrend opportunities may arise. In case of dropping below $1,850 it may mean that the bears start to establish. We need to underline that gold price is in sideways channel for the last two months but short positions seem a good choice for us this week.
It was a strongly bullish week for oil which closed (next months’ futures) at $40.11 and profits more than 7%. The optimism that was all around due to Pfizer’s announcement regarding the effectiveness of the vaccine, lasted until last Tuesday where the oil price climbed above $43 but after that, we saw bearish trend since the demand for oil is expected to remain very low for a long time. A positive fact is that the oil price could make it above $40 but a bearish breakout of this level, maybe could set the last week’s optimism as a parenthesis. The price zone between $37 and $43 is something that the markets prefer during the last months so below $40 we may open short positions.
The Bitcoin party carries on since it closed at $15,975 with profits more than 3% while early in the current week, Bitcoin has already surpassed the price of $16,000. If Bitcoin keeps on this behavior, we may see prices at the all-time highs, around $20,000 which had taken place at the end of 2017 – beginning of 2018. Bitcoin has a remarkable performance lately: six consecutive profitable weeks, and capitalization that exceeds $300 bn. The fear of COVID-19 pandemic, the big money offer which inflates the traditional currencies and the increasing faith of the investors to the cryptos, give many points to a new all-time record before the year closes so we remain buyers on Bitcoin for one more week.