20/07/2020
General Comment
With a second wave of COVID-19 expanding all over the planet, much earlier than we expected and with European Leaders Summit already in its fourth day without agreement, last week closed. USD had the 4th bearish week in a row, the stock markets were profitable while the major commodities (gold, oil) were rather consolidative. This week the main focus is in the upcoming agreement(?) in Europe and from the scheduled news & announcements, the most important are the PMIs on Friday for USA, Eurozone, Germany and UK.
EURUSD (Euro vs US Dollar)
USD appears very weak during the last weeks and combined with the uncertainty in the European Leaders Summit, EURUSD started last week from the price area of 1.13 and closed on Friday at 1.1427. Things are very fragile because a possible agreement in Europe may boost EURUSD even above the last months’ highs at 1.15 and on the contrary, EURUSD may drop to 1.12. The EU Leaders Summit and the upcoming results that it may bring, could be a milestone and a game changer for the pair for the next months and of course there could be a high volatility in the decision time. On Friday, the investing community is going to have a good taste of the pandemic consequences in the global economies, through the PMI announcements. We will wait and see any possible results from the Summit before we open positions this week.
GBPUSD (Great Britain Pound – US Dollar)
It was a corrective week for GBPUSD which opened at 1.2628 and closed at 1.2567. Under the recent announcements from the Bank of England for low Interest Rates in the next period, with a lack for serious developments in Brexit and under the attempt of the UK economy for a lockdown recovery, it seems that GBP was weaker than USD last week. If USD remains weak, we may see a pair’s recovery in the next days so we’ll try some low risk buy positions this week.
USDJPY (US Dollar – Japanese Yen)
Another consolidative week for USDJPY, which closed at 107.03, just 15 pips above the weekly open. The 10 years US yield dropped to 0.61% and it is the 6th week in a row that the pair is moving into a tight price range around 107. It will take important news and strong developments before it can achieve to escape from this area. In the meantime, we’ll keep on applying a range strategy on this pair for one more week.
EURJPY (Euro – Japanese Yen)
Given the very strong EUR in the last days, EURJPY closed the week at 122.30, having strong profits compared to its weekly open at 120.75. Early this week, the pair is keep moving higher so we may see, especially in a case of an agreement. Early this week, the pair is keep moving higher so we may see (especially in a case of a EU agreement), an approach of the yearly high at 124.40. Our selection for this week is buy positions.
EURGBP (Euro – Great Britain Pound)
EURGBP moved significantly higher last week, opening at 0.8945 and closing at 0.9092. There was a bullish breakout of the milestone price at 0.90 for one more time and in case of an EU agreement, it’s possible to see prices above 0.92. It takes a lot of attention though because things are still unpredictable but we’ll try buy positions this week.
USDCAD (US Dollar – Canadian Dollar)
Another neutral week for USDCAD with weekly open and close prices at 1.3580 and very low volatility. The picture of the oil price in the last days is similarly consolidative so the pair is not able to move away from the price area of 1.36. On Tuesday there is the announcement for the Canadian Retail Sales and on Friday the inflation in Canada as well but without a serious change in the oil prices or serious changes on the USD attitude, most likely the pair will remain into the last weeks levels. Range strategy around 1.36 is our option for the current week.
USDCHF (US Dollar – Swiss Franc)
It was another bearish week for USDCHF which opened at 0.94 and closed at 0.9386. The downtrend channel is obvious for the pair: from the end of March that was at 0.9850 and it’s currently moving at 0.94. By approaching to the very strong support of 0.9180, we may see some buyers activating and bullish reactions accordingly. We’ll try some buy positions this week, investing on a possible recovery.
AUDUSD (Australian Dollar – US Dollar)
Although the number of new COVID-19 cases increase significantly in Australia, AUDUSD keeps on rising with a weekly open at 0.6951 and a weekly close at 0.6995. The close price though, shows how difficult and critical for the pair is the price level at 0.70. Early this week, we learnt that the Interest Rates in China stayed unchanged at 3.85% and on Tuesday we expect to see the minutes of the meeting at Reserve Bank of Australia (RBA). Since we believe that most likely we’ll see consolidative to south trends, we’ll open sell positions in the current week.
SP500
Bullish was the last week for SP500 which closed at 3,214 points, with profits above 1%. Slightly bearish is the current week’s open and it will take a breakout above 3,230 points before the Index is able to look higher. On the contrary, a drop below 3,200 points could trigger corrective tendencies since in the real economy, things are not so good, even if the provided liquidity is unprecedented. USD keeps on dropping but we will try short positions this week.
DAX30
It was a bullish week for DAX30 which closed at 12,946 points, performing good profits that touched 2%. Any possible results from the EU Summit will have a critical role on the German stock markets but we’ll invest on a correction by opening short positions this week.
FTSE100
Strongly bullish was the last week for FTSE100 since it closed at 6,266 points with profits circa 2.8%. The Index is much too far from the last months high price at 6,500 points and by keeping into account the UK economy issues, we will open short positions, considering that the correction probability is high.
Gold
Marginally bullish was the last week for gold which closed a bit above $1,811, performing profits close to 0.5%. Gold seems to solidify above $1,800 even if the USD Index was moving above 96. Under a second COVID-19 wave, the fears and the concerns in the global community favour the high gold prices and it’s possible to see levels that we haven’t seen since the autumn of 2011. We’ll keep on opening long positions this week too.
US Oil
Bullish week for the oil spot price, which closed at $19.10 but the September’s futures price, stays frozen a bit above $40. The increased number of the COVID-19 cases throughout the world, intensify the concerns regarding the demand recover and in the same time the news from OPEC mention that the members and the allies of the organization tend to tight the agreed regarding the production cuts and we may expect higher production levels. All this news may press the oil prices lower and if the futures drop below $40, we will open short positions, targeting the support of $38.50.
Bitcoin
Marginally bearish was the last week for Bitcoin with open price at $9,305, close price at 9,212 and losses like 1%. The very low volatility of the last weeks is unprecedented for the Bitcoin but the misery and the price squeeze favour the scenario for a further correction as long as the crypto traders do not feel a wind of optimism. During the last weeks, Bitcoin stays disinterested to the market mood changes while in the same time some other alternative cryptos perform serious profits. This has as a result that the market share of Bitcoin in the cryptos, dropped from 70% to 62%. We remain in our last weeks’ view and we’ll open short positions.
