17/02/2020
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
It was the 2nd in a row heavily bearish week for EURUSD which started from 1.0942 last Monday and closed at 1.0830 on Friday. Last time we saw such price levels was back in the spring of 2017 where EURUSD was recovering from the lows of the end of 2016. The results from USA economic announcements were not very positive but, in any case, it was better from the ones from Germany and Eurozone. Also, the global concerns regarding coronavirus seem to favour USD which seems safer. This week starts with a public holiday in USA (President’s Day) and it is dominated mostly from FOMC on Wednesday and the financial and monetary minutes from ECB on Thursday. The pressures on the pair most likely will carry on so we’ll open sell positions targeting at the first place the price area of 1.08 and maybe lower
GBPUSD
Bullish reaction for GBPUSD even if it started below 1.29, it managed to exceed and to stabilize above 1.30 with a weekly close at 1.3046. Economic news from England were rather neutral and the 0% GDP growth was what exactly the markets expected so there was no serious impact by this. The fears from the post Brexit era seem to calm down and the new Chancellor of Exchequer Rishi Sunak who will replace Sajid Javid is considered to be more markets friendly. The week is full from economic announcements at UK (Unemployment Rate, Consumer Price Index, Retail Sales, Services PMI) so we expect high volatility. We’ll open buy positions this week with main target the price area of 1.32.
USDJPY
Low volatility and weak uptrend for USDJPY last week which attempts again and again to stabilize around or above 110. During the week we saw prices above 110 but the weekly close was at 109.78. This price squeeze at these levels gives signs with high probabilities for a price explosion to some direction. Early this Monday, the Japanese GDP was announced for Q4, 2019 with the disappointing result of -1.6% while the Industrial Production in December was in the same direction with a result at -3.1%. However, JPY is not pressed that much most likely due to the coronavirus concerns that creates buyers to the safe haven JPY. As long as these concerns are not getting worst, a bullish breakout of is possible that is why we’ll take buy positions with a more long-term target of 112.
EURJPY
Heavily bearish was last week for EURJPY which lost easily the milestone price of 120 but it also lost the price of 119 since it closed at 118.90. Last time we saw these price levels was in the last October and now maybe we witness a potential downtrend that may lead the pair to 118.40 or even below. The aforementioned price areas will be the major targets for our sell positions this week.
EURGBP
Strong bearish movement for EURGBP last week with an increase of the weekly volatility, significantly above the average volatility of the last weeks. From 0.8484, the pair closed marginally above 0.83, having performed the biggest weekly drop since the 2nd week of October. The probabilities for a further drop are strong since we go through the 7th bearish month in a row but now we’re entering into a price area that we haven’t seen since the summer of 2016 so we need to be very careful and hesitant. We prefer buy positions this week in the direction of a bullish reaction and we’re keen to close them below slightly below 0.84.
USDCAD
We saw a pause from the great uptrend of the last weeks for USDCAD which opened at the price area of 1.33 and closed at 1.3251. The price of 1.33 was a main target for many investors and traders so a short–term profit taking along with a rise of the oil prices had as a result this pullback. The current week contains many important announcements for the Canadian economy such as the Consumer Price Index, the Unemployment Rate and the Retail Sales. It’s possible to see attempts of recovering close to 1.33 and if that happens, it may act as a springboard for even higher levels (1.35 is a target of many investors). Buy will be our selection for this week.
USDCHF
A clear uptrend took place for USDCHF which was a continuation of the previous one. From 0.9768, the pair closed at 0.9820 and now it’s very close to the price of 0.9840 which is the ticket for entering into the well-known price channel between 0.9840 – 1.0000 which used to be for a long time until the beginning of the last December where a downtrend begun. Since it’s very possible to see this scenario, we’ll take buy positions for this week. On the contrary, a possible bearish breakout of 0.9730 will mean the retrieval of the downtrend that we mentioned above.
AUDUSD
The bullish reaction that we expected took place last week for AUDUSD which managed to exceed 0.67 and to close at 0.6712. This week the uptrend momentum of the last week is still on since the pair is moving to the price area of 0.6730 but there’s a big uncertainty due to coronavirus results on the economy of China so the most possible scenario is to see AUDUSD turning down to 0.67 again, maybe to the support of 0.6680. Very busy week for the Australian economy with announcements such as the RBA Meeting Minutes, the Unemployment rate and the Manufacturing PMI but everything will be dominated by possible developments in China and the coronavirus. Also, we should not forget that on next Friday we have the announcement of the Chinese Interest Rates from the PBoC with the current rate at 4.15%. We’ll open sell positions, looking for profits close to 0.6680.
SP500
Unstoppable and tireless the Index SP500, performed last week new all-time highs at 3,387 points and a weekly close at 3,382 points, with profits above 1.7%. The correction of last month belongs to the past and now the Index is ready for new highs: the level of 3,400 points as a round number is the first resistance level. We remain buyers on SP500.
DAX30
Strong profitable week for DAX30 with a close at 13,752 points and profits like 2%. The all-time record for the Index, which was holding since January of 2018 belongs to the past and now DAX30 is getting into the uptrend unknown. The momentum of the buyers will push the Index higher and higher but some short-term profit takings may cause corrections. Technically, the first resistance is the next round number of 14,000 points and the most obvious support is the level of 13,530 points. We prefer the long direction for this week.
FTSE100
Losses for the Index FTSE100 last week which started the week with profits but during Thursday & Friday it had serious pressures and finally closed at 7,410 points, having lost more than 0.5%. The price area close to 7,400 points seems to act like a strong support so the sideways movement between 7,400 and 7,560 points is very possible. Range trading between the above levels will be our strategy for the current week.
Gold
Good profits for gold last week with a weekly close at $1,584, it performed a rise of 0.9% and approached more to the milestone price of $1,600. The risk averse mood from the investors due to the fears of global coronavirus expansion push the gold prices higher so the scenario of approaching more the $1,600 is stronger. The rest aspects of the world economy do not provide strong optimism in a way that will turn the investors in taking risk. We’ll insist in long positions for one more week, looking for $1,600 as a target.
US Oil
A bullish reaction took place for oil after the big prices drop from the beginning of the year so it could not stay below $50. The weekly close was at $52.44 with profits above 3.8% which consists a strong bullish reaction. The markets have paid off in advance the case of a further production cut from OPEC so a critical mass of buyers appeared which caused the aforementioned bullish reaction. On the other hand, there is serious evidence for a world growth slowing due to the consequences of coronavirus and the International Energy Agency announced that the oil demand for the Q1 of 2020 will be negative for the first time after 2009 where the world economies were deep into the financial crisis. Moreover, if the expectations regarding the production cuts from OPEC deflate then maybe we’ll see the bears to return. This scenario we will follow by opening short positions this week, looking for profits close to $50.
Bitcoin
Corrective movements for Bitcoin last week after the explosive rise of the last period. We should remind that in the beginning of 2020 it was close to $7,300 while the last two weeks it was moving above $10,000. The week before, the price was above $10,000 until last Saturday where short-term profit takings caused a weekly loss of 2.8%. This reasonable correction does not seem to be a threat for trend reverse so far so we’ll keep on opening long positions targeting $10,000 again.
