02/09/2019

IMPORTANT DISCLAIMER

 The information of this report is of a general nature only. It is not a personal financial advice. It does not take into account your objectives, financial situation and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.

EURUSD

EURUSD dropped to the lowest levels since May 2017 after threats for an economical slowdown in Eurozone, due to German retail sales announcement and to softer Eurozone inflation. Also, there’s a global rumour that ECB will announce new & massive stimulus while the US economy seems more steady and solid. Current Monday will be less volatile (but with a danger for spikes) because it is a national holiday in USA (Labour Day). The rest of the week is full of news for both Europe & USA with the flagship of the week on Friday and NFPs announcements. It seems that the new downtrend that broke the important support of 1.10 has a long way to go and it’s possible to see EURUSD this week below 1.09. Our sell positions will have a main target the price of 1.0880. Other important news besides NFPs are the US ISM (Manufacturing & Employment) on Tuesday, Eurozone Retail  Sales & US Trade Balance on Wednesday, Markit Germany Construction PMI & ISM Non- Manufacturing / Services Composite on Thursday and German Industrial Production & Eurozone GDP on Friday.

GBPUSD

GBPUSD, after it broke 1.23 last Tuesday, it moved down with a heavy downtrend and so the pair closed at 1.2159. The political environment is getting blurrier after Boris Johnson decision for suspending the parliament. 1.2160 is a strong support for the pair and even all the evidence favours the bears (strong USD and Brexit political issues), it seems that there can be a soft retracement. Improved UK PMIs during the week, may give more fuel to this reaction. Despite these facts, we estimate that long-term bearish channel for GBPUSD is still on. Our Machine Learning models confirm it so we’ll open sell positions, targeting 1.2120 and 1.2060 but in case of dropping below 1.20 then we’ll talk about a free fall with unpredictable dropping levels.  Besides US news that we saw above at EURUSD analysis, it is an important week for UK economy as well with major news the Markit PMI on Monday, the Markit/CIPS Construction PMI on Tuesday, the Services & Composite PMI on Wednesday and Bank of England TNS Inflation for the next 12 months on Friday.

USDJPY

Our last week’s prediction for USDJPY was really accurate. Not only the bullish trend that we had estimated was confirmed but our target was accurate too, since it was 106.60 and last week’s high was at 106.68. Fundamentally, the USA – China trade war still dominates and Trump’s part does not give any rays of light for negotiating mood for the moment. USD still remains strong but the safe- haven ability of JPY gives a balance to the pair. Our Machine Learning models gave a short signal and since the price area of 106.60 – 106.70 is a strong resistance, we will open sell positions with targets 105.90 and 105.40. Besides US news where NFPs on Friday dominate the news & fundamentals there’s also the Japanese Monetary Base announcement on Tuesday and a series of announcements on Friday: Overall Household Spending, Real Cash Earnings, Labour Cash Earnings, Leading Index CI and Coincident Index.

EURJPY

We were very close in taking our 1st target of our sell positions last week since the week’s low was at 116.55 and our target was at 116.50. The week was profitable though because we always close our positions before the weekend and our positions were in the money. Last week was volatile with ups and downs but the heavily bearish Friday confirmed the weakness of EUR and the downtrend of the pair. The dovish outlook of ECB and claims that extra stimulus is required gives extra reasons for having a weak EUR. On the other hand, JPY is a traditional safe-haven asset and the threat of a global recession gives credits and points to it. Our sellpositions will target the price of 115.60 which is a long-term target for us the last weeks. European and Japanese economies news are mentioned above at EURUSD and USDJPY sections respectively.

EURGBP

The uptrend reversal movement of EURGBP didn’t take place last week which was a consolidative and tight range week. Both EUR and GBP seem weak but the Brexit issues are more critical and deeper. Our Machine Learning models still support the uptrend so we’ll open buy positions with first target 0.9120 and second target 0.9175.

USDCAD

Our sell positions took the first target of 1.3260 and couldn’t get the second target of 1.3210 since market’s low was at 1.3224. This happened the first two days of last week and then the pair took a strong uptrend, closing finally at 1.3311. This week there is the important Rate Decision from Bank of Canada on Wednesday and although some market participants are looking for a rate cut, it seems that there’s no such case at this moment. The last weeks, Canada had solid fundamentals but the strong USD has given a balance to the pair. The trading range of the last days was between 1.32  and 1.3330. Our Machine Learning models show an uptrend and maybe this the time for breaking this tight channel. Our buy positions will target 1.3380. Other Canadian news of the week include the Manufacturing PMI on Tuesday and the very important announcement of the Unemployment Rate on Friday.

USDCHF

The probability of bullish reversal for USDCHF finally confirmed. Last week was extremely bullish and USDCHF took almost 2%, closing at 0.99 (although there was a weekly high at 0.9917). It’s clear that the pair will try the 1:1 rate again and this will take place this week. Our buy positions will exit a few pips below 1:1, at the price area of 0.9980 – 0.9990. If the resistance of 0.9935 is broken for good we will increase the size of our position. This week the Swiss economy will have a more active role on the pair because there’s a list of important news and announcements: Retail Sales & Manufacturing PMI on Monday, Consumer Price Index on Tuesday and above all, GDP on Thursday.

AUDUSD

Very good decision for avoiding trading AUDUSD last week since the pair opened at 0.6735 and closed at 0.6728, only 7 pips lower! AUD buyers based on improved Chinese PMI early this week do not seem enough to keep the pair in uptrend and we believe that the bearish trend will dominate. There is no fresh & encouraging news regarding USA – China trade war so our sell positions will target 0.6680 and 0.6620 this week. News that may affect the pair (except US NFPs on Friday and other US news that we saw at EURUSD analysis) include RBA Cash Rate Target on Tuesday, Australian AiG Performance of Service Index & Chinese Caixin PMI (Composite & Services) on Wednesday, the Australian GDP on Wednesday and the Australian Trade Balance on Thursday.

SP500

SP500 had important profits last week, more than 3.5%. Most of the days were bullish so we took advantage of our low-risk & opportunistic trading strategy. Things have not changed at all regarding all the fundamentals and our Machine Learning models do not give a clear signal. We’ll keep on trading with small/opportunistictrades depending on the Trade War news and perspectives.

DAX30

Last DAX30 had important profits, close to 4.5%. Our low-risk & opportunistic trading strategy gave some profits but now we consider this movement as a fixed uptrend that is going to give more profits. Our buy positions will have as main target 12,040 points and above these levels, 12,230 points.

FTSE100

A positive & profitable week for FTSE100 passed by with profits very close to 2%, although the beginning of the week was bearish. We’ll follow this new bullish trend and our buy positions looking to exit at 7,300 points (1st target) and 7,380 points (2nd target).

Gold

Gold started last week with a very bullish attitude, allowing us to take the first target at $1,525. After that, it dropped but still the weekly close was above $1,520. The August that just ended gave totally 7% profits. The trend of Gold, our Machine Learning models and the demand for the most safe- haven asset in an environment full of fears and concerns, lead us to open new buy positions, targeting $1,540 (1st target) and $1,560 (2nd target). The Hong Kong unrest that may increase Gold buyers may cause Gold to hit even the price areas above $1,600 very soon.

US Oil

US Oil had a bullish week until Friday that lost about 1.5%, demoting the weekly profits below 3.5%. Weekly close was below $55 which shows us that US Oil couldn’t make it out of the $50-$55 range that we have suggested the last weeks. The Russian Energy Minister spotted that Russia’s oil output cuts will be below those that had agreed at OPEC and non-OPEC producers deal. It seems that it’s going to be a bearish week for the Commodity, so our sell positions will have a first target at $53.20 and maybe at $52.20.