03/08/2020
General Comment
The coronavirus pandemic is still a very major issue for the world community with increased number of cases in USA, Europe and emerging countries while many voices claim that the 2nd wave is already here. USA also announced a recession of 32.9% for the Q2 2020 which the greatest one in the last decades. USD had a break–down outlook, the stock markets in USA had some profits while the European ones dropped significantly. Finally, gold is touching $2,000 and oil prices are in a consolidation around $40 during the last weeks. In the current week, the dominating factor for the markets will be the COVID-19 developments and from the scheduled announcements, we expect the NFPs on Friday as well as the US Unemployment Rate in July.
EURUSD (Euro vs US Dollar)
Another bullish week for EURUSD which opened at 1.1644 and closed at 1.1777, having reached during the week, prices above 1.19. Last Friday, we saw a volatility explosion and a price correction after the last days’ rally. The weak USD in combination with the latest euphoria after the recent EU agreement, boosted the pair to two years price record. The last Friday’s correction could have a resumption below 1.17 but the uptrend of EURUSD doubtless and many traders have in mind the price area of 1.20. The next Friday’s NFPs need a lot of attention due to a possible high volatility but we keep on being buyers on the pair for one more week.
GBPUSD (Great Britain Pound – US Dollar)
Explosively bullish week for GBPUSD since from the area of 1.28, it managed to exceed 1.30 and to close at 1.3085. The high coronavirus numbers in UK have resulted local lockdowns but the big USD drop of the last weeks has allowed the pair to have such a rise. There was evidence on last Friday for a correction but a possible recovery above 1.31 and even more, above 1.32 will limit very much such a probability. Besides NFPs is USA, we should have our eyes on BoE Interest Rates decision and monetary policy minutes on Thursday but we’ll keep on opening buy positions this week as well.
USDJPY (US Dollar – Japanese Yen)
Bearish was the last week for USDJPY with a weekly open at 106.01 and a weekly close at 105.86 but the important thing to mention is that during the week we saw prices close to 104. The 10 years old yield in USA has fallen to 0.54% and the downtrend may return in any time but last Friday’s reaction of the pair gives us thoughts for a recovery, up to the price area of 107, so we’ll try some buy positions this week.
EURJPY (Euro – Japanese Yen)
Another bullish week for EURJPY (the 6th in a row) since EUR after the recent agreement in EU, took a strong momentum. The weekly open was at 123.42 and the weekly close at 124.67, with some mid-week movements above 125. Last time that we saw prices around 125 was in April 2019 but even if the pair has a strong uptrend, we cannot exclude corrective tendencies so we’ll try some low-risk sell positions that we may close and turn them to buy positions, if the pair exceeds 125.
EURGBP (Euro – Great Britain Pound)
It was a bearish week for EURGBP which in any case managed to keep the 0.90 level. The pair is in balance during the last weeks because both EUR and GBP appear strong so we may see the same situation in the near future. Positions by using a range strategy will be our selection for the current week.
USDCAD (US Dollar – Canadian Dollar)
Consolidative movements for USDCAD during the last week, with open and close prices at the area of 1.3410 – 1.3420. The pair took advantage from the falling oil prices and from a temporary strength of USD by the end of last week so it was able to recover from a big drop that brought it until 1.3330. The difficulty of a bearish breakout of 1.3315 and a possible further reaction of USD could lead to a recovery of USDCAD above 1.35. On the contrary, prices below 1.3315 may put the pair into a strong bearish channel. By giving higher probability to the first scenario, we’ll open buy positions this week.
USDCHF (US Dollar – Swiss Franc)
The free fall of USDCHF carried on for one more week and the pair from 0.92, dropped to 0.9134 having touched the price area of 0.9050 at some stage. Last time that we saw this price area was in the beginning of 2015 so a reaction from buyers in such low price, makes sense. It is really unknown if these reactions can change the strong downtrend outlook of the last months but we’re keen to try some buy positions.
AUDUSD (Australian Dollar – US Dollar)
We saw another bullish week for AUDUSD which started from 0.7085 and closed at 0.7143. The weakness of USD has allowed the pair to appear strong even if the picture of COVID-19 is not good at all in Australia since the government announces local lockdowns, especially in the Melbourne area. Early this morning, we saw the Chinese Caixin PMI at the impressive value of 52.8 so AUDUSD kept its levels but later on, we witness strong correction trends. A possible bullish breakout of 0.72 may bring new buyers in the game but the correction may carry on so we will open sell positions this week.
SP500
Profitable was the last week for SP500 which closed at 3,269 points, about 2% higher. The dominating factors in the US stock markets are still the results of big companies and the expectation of a new stimulus package from FED. We need to add the COVID1-19 issue to all these that may turn things upside down either through fears and concerns of a second lockdown either through positive news from medicine and vaccines. Now the all-time highs of last February are very reachable and this fact retains a positive outlook. Our selection is long positions for the current week.
DAX30
Very bearish was the last week for DAX30 which closed at 12,293 points and losses like 4%. It was the 2nd in a row corrective week for the Index so the concerns have been increased. It takes a return above 12,700 points in order to retrieve the good climate but in a case of approaching or breaking out the level of 12,000 points, we won’t speak for a correction anymore but for a confirmed downtrend. We give more chances to the first option so we’ll try buy positions.
FTSE100
Strong bearish trends for FTSE100 last week since it closed at 5,861 points and losses close to 3.5%. The negative outlook in the European stock markets and the issues of the UK economy do not allow an Index recovery so now the next support is the price area of 5,650 points which will be the target of our short positions this week.
Gold
The castle of $2,000 was conquered last week. The weekly close price was at $1,993 but the weekly high price was above $2,004. The safe–haven properties of gold in between the fears and the concerns that COVID-19 brings as well as the complications in the money markets through a new stimulus package have developed conditions of strong rally that smashed the record prices of 2011. Given all the fundamental factors, we may see a rally continuation but there’s also the case of profit takings or/and positive expectations from the companies that work on COVID-19 vaccines so corrective movements may occur. Under these considerations, we will open low-risk short positions this week.
US Oil
The spot price of oil closed at $20.86 last week but the futures price dropped to $40.40, having losses above 2%. The concerns that COVID-19 increased cases may delay the world economy recovery and the demand in oil, presses the price. The weekly report that released on last Friday showed a new production cut by 2 million barrels per day in USA and this gave a temporary boosting to oil. However, it seems that the oil prices have been stabilized in a channel between $40 and $42 and we need to see important news or changes for a trend obtainment. Range strategy positions between $40 and $42 is our selection for the current week.
Bitcoin
Another strongly bullish week for Bitcoin with a close price, marginally above $11,000 and profits more than 11%! On Sunday though, Bitcoin showed strong bearish trends which caused a drop from the price area of $12,000, to $11,071. In any case, it was the best week for Bitcoin since mid 2019 as the fears of COVID-19 and some possible side effects of a new stimulus package create buying conditions. The recent big correction though, proves that still we are not into a confirmed uptrend so we may witness consolidations or even further corrections. We believe that it is better to stay out this week because the high volatility is able to hit our Stop Losses in any direction that we may choose.
