03/02/2020
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
After four bearish weeks in a row, EURUSD had a bullish reaction approaching 1.11 again (weekly close at 1.1095) and this has to do with the big rises of Thursday and Friday. All the attempts of a bearish breakout of 1.10 stopped until 1.0992 but the economic announcements from USA were evaluated better than the European ones. Another big factor for risk-averse mood is the fast expansion of the coronavirus and the concerns of the investors that lead them to safe haven assets. The news & announcements of the current week are dominating by the PMIs for Europe and USA but above all on Friday there’s the Unemployment Rate & NFPs in USA. It’s very difficult to have secure estimations at this moment so we’ll stay out this week.
GBPUSD
Bullish was last week for GBPUSD and the price moved away from the 1.30 zone. It is also positive that the pair managed to close above 1.32 which is a price that GBPUSD approached and exceeded on last Friday’s evening. There are two major events that dominated last week: UK is officially outside of the EU with all the consequents and the hawkish monetary policy from Bank of England and the mood of keeping the Interest Rate at its current price. The bearish opening of the current week puts some concerns on the table since the pair dropped again below 1.32 by moving close to 1.3150. The bet for the uptrend continuation is the high prices that we saw at the end of the year at the price area of 1.3250. A bullish reaction of this level may put to the test the downtrend of the pair after last December’s elections and may trigger the more long-term uptrend continuation which started from mid-August. We’ll trust this option and we’ll open buy positions this week with target close to 1.3250. There is no major news for the UK economy this week but we should pay extra attention to the NFPs announcement on Friday.
USDJPY
The bearish trend of USDJPY carried on last week as well and so from 108.93 on last Monday, we had close price on last Friday at 108.33. The announcement from World Health Organization regarding coronavirus which was full of concerns and warnings for measures for all countries lead the investors to buy JPY which caused the USDJPY drop. During the current week we don’t expect serious developments on this issue so we think that the drop will continue. We’ll open sell positions with main target the price area of 107.85. Things can change mostly from economic announcements and the main candidate for that is NFPs on next Friday.
EURJPY
After the big drop, EURJPY provided consolidations last week and closed slightly positively. Also, we need to note that the price range was also tight: from 119.77 to120.42. The pair pulled through the pressures from the JPY buyers and managed to close above 120. Monday’s open acts the same so there’s an optimism for an uptrend: we’ll open buy positions looking for profits close to 121.
EURGBP
Bearish was last week for EURGBP which opened at 0.8430 and closed at 0.84. The uptrend mood is obvious and this mood became even stronger after the monetary policy announcement from Bank of England on last Thursday 30/1 so at the first stage we monitor the 0.84 breakout and the support of 0.8330 which is a low price since the spring of 2017. The bespoken levels will be the targets for our sell positions this week.
USDCAD
The uptrend for USDCAD carried on in the same tempo and the same tension. Opening at 1.3149, with an exception of last Tuesday’s correction, all the other days were clearly bullish and finally the weekly close was at 1.3228. With helpers the positive economic news from USA that strengthened USD and the big drop of oil prices, the pair seems to be in a strong and solid uptrend even if the Canadian GDP for November that released last Friday was slightly better than expected. A possible trend change is able to take place through the Friday Unemployment Rate announcements for both USA and Canada and of course we’ll keep our eyes on oil prices which are a lot correlated with CAD. Our buy positions will target the price area of 1.33 this week.
USDCHF
While the first three days of last week gave a bullish mood to USDCHF and lead it up to 0.9776, last Thursday & Friday brought back the price of the pair to its downtrend channel. The profit dissolved and USDCHF closed about 65 pips below its open at 0.9633. Now the pair is approaching low price levels that we have not seen since the September of 2018 and given its erratic attitude we may see a bullish reaction. Buy is our selection for this week and the main target is close to 0.97.
AUDUSD
Important drop for AUDUSD last week and from its weekly open at 0.6811, dropped to 0.6686 with loss more than 100 pips which is not very usual for the specific pair. The economy and the currency of Australia are both correlated with China and it seems that are both affected from the coronavirus. Last time that the price of the pair was below 0.66 was in the beginning of 2009! This fact may trigger buyers’ actions that could absorb the free-fall. Early on Monday morning the pair is moving around 0.67 even if the Chinese Caixin PMI was announced below expectations and the Asian stock markets are sinking (currently China is -9%). We need to wait and see if the wave of the buyers is able to revert the big downtrend that started last December but there’s still enough room (and hopefully profits) for us and our sell positions until 0.66.
SP500
It was the 2nd in a row correction week for SP500, after the crazy uptrend of the last months. Index closed at 3,228 points with loss circa 2%. Early on the current week the SP500 futures are moving are on the rise and we cannot exclude the case that this correction closes to an end. Technically, a breakout above 3,260 points may preludes the ending of the parenthesis but a breakout below 3,215 points would reinforce the scenario of a further drop. Our current week strategy is long above 3,260 points and short below 3,215 points.
DAX30
Important loss for DAX30 last week which dropped from 13,400 to 12,932 points and overall losses close to 3.5%. The last time that we had such a weekly drop was in the end of July which shows how strong was the bearish reaction from all-time highs for the Index. We trust this trend and we’ll open short positions on DAX30 in the current week looking for profits at 12,550 points.
FTSE100
Important loss for FTSE100 as well which closed at 7,260 points and weekly collapse that touched 4%. Scenarios for prices close to 7,000 points are active again but of course there are intermediate supports such as the ones at 7,230 and 7,110 points respectively which may delay a possible sink. The above levels will be the targets for our short positions this week.
Gold
It was a week with important profits for gold which touched the price of $1,590 at its weekly close, rising by 1.3% according to last week’s close. Many investors trusted gold as a safe haven asset I n between of global concerns for the coronavirus expanding and the results that it may have to the economic growth of China and abroad. In the beginning of the current week we can see a price de-escalation below $1,580 but it’s far in order to put to the test the big uptrend that started from August of 2018. We believe that prices close to $1,600 is a realistic scenario and we’ll select long positions this week.
US Oil
New price drops for oil prices last week where the weekly close was at $51.63 while we saw some attempts of the $51 breakout. The weekly loss was circa 4.6% and the de-escalation of oil prices after the big rise in the last months of 2019 is on and on. Coronavirus and the angst that produces to the global economies’ growth is an important factor but now there are some voices into OPEC for further production cuts in order to protect prices from a further drop. Given the situation with coronavirus, if there are no immediate reaction from OPEC, we may see prices close to $50 and by trusting this, we’ll open short positions this week.
Bitcoin
Enough and significant profit for the cryptos’ king last week. More specifically, Bitcoin opened at $8,600 and closed at $9,329 with profits close to 8.5%, reminding the oldies goodies days for the cryptocurrency markets. The visible price level of $10,000 fills with optimism the crypt traders for these assets classes and by trusting the fuel of the buyers, we’ll open long positions looking at $10,000 as a main target.
