23/12/2019

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

Last Friday defined in a great degree the performance of EURUSD for the last week. The pair opened at 1.1127, reached 1.1175 on Tuesday and closed at 1.1121 on Thursday, very close to the weekly open. On Friday though, a big drop took place which had the result of the bearish breakout of 1.11 and a weekly close at 1.1075. In the current week, it’s very possible to witness a low volatility due to Christmas holidays and maybe we’ll see some spikes due to low market volumes. EURUSD returned back to the usual price zone of the last weeks and it’s possible to see a movement to the area of 1.10. 1.10 is also a strong support and so the further movement of the pair seems uncertain for the moment: either there will be a bearish breakout of 1.10 and a heavy downtrend will be alive either we’ll see a retracement to the price area of 1.11. We’ll prefer sell positions, targeting 1.10 before we redefine our strategy. The Christmas period in any case does not favor big market movements.

GBPUSD

“Buy the rumor, sell the news” use to say the experienced traders and investors and this expression was absolute right in the case of GBPUSD last week. The week that followed the UK elections caused a huge drop for the pair which opened at 1.3339 and closed last Friday at 1.2998 while in the same day we saw prices at 1.2978. The positive financial announcements could not help the British pound since all the fears for a non-deal Brexit dominated, based on some statements of Boris Johnson about a delay of the Brexit implementation. In the current week, there’s no news or announcements for the UK economy so we expect GBPUSD to move according the Brexit updates and by some announcements from USA. In any case, we can distinguish a probability for a bullish reaction above 1.30 so we’ll open buy positions with major target the price area of 1.32

USDJPY

Slightly bullish was the last week for USDJPY which opened at 109.30 and closed at 109.44. It seems that the uptrend of the pair is fixed and solid, helped by the US stocks rally and by the recent claims from both USA and China sides for an immediate implementation of the deal regarding the trade war. On the other side, the low volatility and the inadequacy of breaking out the milestone price of 110 bring some concerns and doubts. The conclusion from the above is that the weekly trend should be neutral to slightly bullish. Given the low volatility, it’s very difficult for the traders to take profits above 110, so this will be the target for our buy positions for this week. Of course, we should not ignore unexpected and surprising news from China side but mostly from US and Donald Trump side which potentially may cause an upside-down mode for the trend of USDJPY.

EURJPY

We saw a correction week for EURJPY which opened at 121.63 and closed at 121.21. The drop was not that strong though in order to breakout the price of 121 which is very die hard from the mid-October. Also, we can see a probability for a weak EUR for the next period of time and maybe the price of 121 cannot make it for a long time. We must pay a lot of attention to the last two days of the current week because there are important announcements for the Japanese economy as well as the speech of Haruhiko Kuroda (Bank of Japan) in the Councilors Meeting at Nippon Keidanren (Japan Business Federation) in Tokyo. Sell is our option with main target the price area of 120.80.

EURGBP

It was a very bullish week for EURGBP with a weekly close above 0.85, at 0.8514 while the weekly open was at 0.8332, almost 180 pips lower. The weak GBP after some doubts for a Brexit deal dominated on the pair which had strong bulls during mid-week. This reaction was rather too much for the pair since the very strong EUR is not a case lately. It means that we should expect a reasonable bearish reaction and if there’s a 0.85 bearish breakout then the road is open for the next support at 0.84. This will be our strategy and our target for the current week: short positions with take profit close to 0.84.

USDCAD

Bearish was the exchange price between USD and CAD last week. The drop was rather slight since the weekly open was at 1.3175 and the weekly close at 1.3148. The biggest part of the drop took place on last Wednesday after some positive news for the Canadian economy but on Thursday and Friday the pair had a bullish reaction after some negative news, mostly from the Retail Sales announcement which had a result of -1.2% in October, versus expectations for +0.5%. A big factor was also the rising oil prices. USDCAD shows a stamina above 1.3150 – 1.3160 and since the USD seems strong, most likely we’ll see a bullish reaction to the price area of 1.32 which will be the target for our buy positions this week.

USDCHF

USDCHF had some fluctuations last week with a bearish trend that lead it close to 0.9770 but on Friday the pair recovered from the weekly losses and the week closed at 0.9828, just 5 pips below the price open on last Monday. We see a return to the price zone between 0.9830 and 0.9980 that we got used the last months. Under these circumstances, we’ll prefer buy positions, targeting the price area of 0.9870 at the first place.

AUDUSD

AUDUSD carried on its bullish reaction after the bottom prices of last August and September and the price area of 0.6670. More specifically, the pair opened at 0.6884 and closed at 0.6898. Early this Monday, the pair is moving above 0.69 and if there will be a breakout of the critical resistance of 0.6930, then the probability to see 0.70 is high.  The positive Trump’s statements regarding the agreement between USA and China favor this option even more, especially if the markets judge it in a positive manner. Taking under consideration the low volatility of the week, we’ll open buy positions which will close a bit below 0.70.

SP500

Unstoppable is the US Index SP500 which broke out the resistance of 3,200 points very easily and closed above 3,220 points. All days except Tuesday were clearly bullish with Monday, Thursday and Friday to be the leader days. The breakout of the round resistance of 3,200 points happened on Thursday and from then and on the uptrend carried on by closing with weekly profits close to 1.4%. It’s very difficult to resist in the temptation of being buyer in such a market but a lack of interest during the Christmas holidays it’s possible to slow down the crazy trend of the Index. The trend is undoubtedly bullish and all the traders and investors wait to see when this reasonable correction will take place. We won’t spend the rest of our lives waiting for this correction, so long is our option again.

DAX30

The correction that the markets expected for DAX30 finally happened but in a very small scale. The drop of 0.15% is rather a bullish slow down than a price correction because after last Thursday we saw a bullish reaction that brough back the price of the Index to the area of 13,300 again. This price zone is a resistance so we expect to see a sideways movement around this price before it defines its trend. Given this anaemic correction and the clear trend which has begun from last August, we consider the persistence in the price area of 13,300 points very positive. We cannot also ignore the ceiling price area of 13,500 points which is close to the historical highs otherwise we could be strongly buyers. Since we have observed brutal corrections close to 13,500 points, we will open long positions but we’ll be very careful in any bearish reactions.

FTSE100

Important profits close to 2.5% we had last week for FTSE100. The resistance of 7,430 points was easily broken as well as the round milestone resistance of 7,500 points and the Index closed at 7,569 points. FTSE100 had an inverted trend compared to GBP but the current price area is a multi–weeks high (prices above 7,500 points didn’t happen since last July) so a possible reaction of GBP in combination with some short term profit takings may lead to a correction to the price area of 7,440 points which will hunt with our short positions this week.

Gold

Very low volatility for gold last week which moved to the tight channel between $1,470 and $1,481 while the weekly close was at $1,478 with weekly profits circa 0.14%. It seems that there’s a fixation into this tight price range which the markets and the traders consider as fair for this period of time according to the risk mood, the geopolitical situation and the USD price. It’s obvious that in order to have a game changer for the gold prices, one or more of these factors should change too and then we’ll see a new trend for the gold. Technically speaking, a bullish breakout above $1,492 would fire uptrend scenarios and a drop below $1,460 will strengthen the scenarios of a downtrend. Since we trust the first scenario, we’ll open buy positions with first target at $1,492.

US Oil

Bullish was last week for US Oil prices with open price at $59.78 and close price at $60.31 or profits close to 0.9%. The profits could be significantly higher if didn’t have the strong correction on Friday which made the oil prices from $61 to return back to the price area of $60 although we saw prices below $60, at $59.93. The OPEC meeting in the beginning of the month was not a game changer because many countries and especially Russia do not agree to further production cuts. On the other hand, the positive news from USA and China trade war and an expected agreement implementation, triggered scenario for higher demand and that is why we saw price rising. If this progress gets consumed by the markets & investors then a price remaining below $60 could lead to a further drop, short term at $59 and long term at $55, where the oil price was a few weeks ago. On the contrary, if the price recovers above $61 in combination with the higher demand expectation could mean the continuation of a heavy uptrend. We prefer the first case and we’ll open short positions this week. The current week is very dangerous though because due to low volumes we may see fake trends & breakouts.

Bitcoin

Last week we finally saw a strong bullish reaction for Bitcoin (reminding that the crypto markets are opened 24/7) with profits close to 5.5%, since the weekly open was at $7,115 and the weekly close was at $7,510. On Wednesday we saw the strong signs for the upcoming uptrend after the bottom prices at $6,425 with lots of buyers that caused a price recover above $7,000 again. After three quiet and low volatile days there was a new wave of buyers on Sunday which brings Bitcoin close to the important price area of $7,600 – $7,700. A bullish breakout of this zone, technically wise, would mean a strong reaction to the downtrend that begun last October. On the contrary, if price is not able to exceed this price zone then this bullish reaction should be considered as temporary and we’ll see the downtrend continuation for Bitcoin. We believe in the second option and we’ll remain sellers.