06/07/2020
General Comment
The Unemployment Rate in USA dropped to 11.1% in June and the Unemployment Rate in Eurozone which was at 7.4% in the same month but the forex markets did not have any special fluctuations and moved into the ordinary ranges of the last weeks. The coronavirus cases, are moving during the last days in extremely high levels, especially in USA and in some other countries such as Brazil and India. The stock markets performed profits while we saw consolidating movements at the commodities markets. The current week, besides any coronavirus developments, is relatively quiet regarding news & announcements and the low volatility may carry on. The liquidity in the system remains high and this fact keeps on supporting & triggering uptrend market movements.
EURUSD
Marginally bullish was the last week for EURUSD with open price at 1.1218 and close price at 1.1243. The volatility is still in very low levels and the pair during the last weeks is moving into a tight range between 1.1170 and 1.13. It’s obvious that it needs something special in order to perform a bullish or a bearish breakout from this channel but early this morning EURUSD has a strong bullish behaviour and it’s already moving very close to 1.13. On Monday we’ll see the announcements of PMIs in USA, on Wednesday the Economic Growth Forecast from European Commission and on Friday there is the Ecofin session. Generally, USD seems still overvalued and its downtrend in a mid to long term level is very likely. We’ll open buy positions this week, when we validate a breakout above 1.13.
GBPUSD
It was a bullish week for GBPUSD, as it closed at 1.2482, significantly higher than the weekly open price at 1.2334. EU and UK continue the conversations about the terms and the conditions of the Brexit and there’s a new negotiation round this week in London. It will take indeed new fuels in order for the pair to exceed 1.25 otherwise it will remain into the range of 1.2250 – 1.25. A breakout above 1.2550 opens the road for the price area of 1.28 but on the contrary, a possible drop below 1.24 will support downtrend scenarios. Since we consider the 2nd option as more possible, we’ll open sell positions this week.
USDJPY
Slightly bullish was the last week for USDJPY as it opened at 107.06 and closed at 107.50. It seems that under the certain circumstances, the well–known risk behaviours of USD and JPY have changed. Early this week, the pair is moving higher at 107.70 but indeed it will need an approach to 110 so we can define an uptrend. On the other hand, it will take a clear bearish breakout of 106.50 for a downtrend movement. The sideways movement is a 3rd and probably the most reliable option so we will prefer range strategies for the current week.
EURJPY
It was the 2nd in a row bullish week for EURJPY which opened from the price area of 120 and closed at 120.80. The current week opened with a bullish momentum as well and there’s already a breakout of the important resistance at 121.50. The price areas of 122.40 and 123.70 now seem realistic enough and these will be our main targets for our buy positions this week.
EURGBP
It was a week of a violent return to 0.90 for EURGBP, even if we saw prices close to 0.92 during the week. Given the strong EUR during the last hours and by keeping in mind that the support of 0.90 is still standing, we may see bullish reaction so we’ll favor buy positions this week.
USDCAD
Bearish was the last week for USDCAD (weekly open at 1.3670 – weekly close at 1.3547) even if the oil prices performed important profits. The news from the Canadian economy were not negative so we should render this attitude to the strong USD as a safer option into a risk-off general mood. Next Friday the Unemployment Rate of Canada will be released but, in any case, we may see prices close to the support of 1.34 and this will be the main target for our sell positions.
USDCHF
Another bearish week for USDCHF which closed at 0.9441, confirming the downtrend channel that has been developed since the end of March. CHF seems to drop further as the investors consider USD as a safer option so we need to see if the support of 0.93 is threatened. Sell positions is our selection for this week.
AUDUSD
AUDUSD keeps on rising and it closed last week at 0.6936 while early this week it is approaching 0.70 even more. On Tuesday we will find out the Interest Rates and the monetary policy in Australia and in combination with some Chinese announcements it will add interest into the battle of conquering the price area of 0.70. Of course, there is always the probability of a retracement back to 0.68 but before a bearish decline, we’ll trust AUD by opening buy positions this week.
SP500
SP500 returned to the profitability last week and closed at 3,115 points, about 3.7% higher. The stock markets do not bend despite the uncertainty and the pressures in the real economy since there’s a huge liquidity and a hope of security for further liquidity if needed. This week opens with positive Index futures and the price area of 3,230 points which is the highest price after the COVID-19 era, is now a visible target. We need to underline that in case of a “the emperor has no clothes” phenomenon we may see heavy corrections but for the moment we’ll on supporting long positions.
DAX30
Important rise for DAX30 last week which closed at 12,570 points and profits like 4.35%. The futures of the Index start this week with the impressive +1.6% and the resistance at 13,000 points seems very a realistic target for our long positions.
FTSE100
Marginal rise for FTSE100 last week with a close price at 6,139 points and performed profits a bit above 0.5%. This Index also, starts the current week with profits (futures are at +1%) so the investors keep their eyes at 6,500 points. We’ll do the same by opening buy positions.
Gold
Gold managed to breakout the level of $1,800 during last Tuesday but straight away we say heavy pressures and the week closed marginally lower at $1,787. Of course, gold is favoured by the investors in periods of uncertainty and low-risk mood but on the other hand these extremely high levels (9 years highs) result liquidations and profit takings. With no important news this week, we may see further corrections to the important support of $1,760 which will be our main target for our short positions this week.
US Oil
It was indeed a bullish week for oil since the spot price closed at $17.36, performing profits that touched 10%. Oil futures were profitable too but the margin was lower. Without any special developments or changes in supply and demand, the oil prices recover after the recent shock that brought the spot prices even below $8 during last April but of course such a heavy uptrend hides corrective movements as well. Until now, only 1-2 such weeks have appeared but as long as the uptrend continues these corrections will increase. Possible conflicts between the OPEC countries regarding the implementation of their recent agreement for a production cut along with the transport limitations due to the COVID-19 may press the prices even more. Short is out weekly selection.
Bitcoin
Another bearish week (the 4th in a row) for the cryptos king, Bitcoin. The week closed at $9,077 and losses 0.5%. This low volatility is very rare for Bitcoin since from the beginning of the May it is moving between $8,700 and $10,000 but there are more and more opinions that we may see very soon a violent channel breakout and big movements. The security issues keep on rising in the last period but the fact that more than 70% of the Bitcoins holders are in the money does not allow heavy pressures. We may see Bitcoin staying into this channel for one more week so maybe range strategies is the best option.
