24/08/2020
General Comment
The coronavirus pandemic and the consequences in health & economy is still in the centre of the world’s view. The number of cases in Europe and USA is increased and even the probability for lockdowns is low, there are certain concerns regarding the issues of the economic recovery. USD showed some recovery signs, mostly after the FED session on Wednesday due to all signs which agree that the low Interest Rates policy will carry on in the following period. EUR was marginally bearish though. The US stock market kept on riding while we had rather consolidative movements in gold and oil prices. In the current week, most of the world’s eyes will be on the 44th Jackson Hole Symposium and the year’s theme is “Navigating the Decade Ahead: Implications for Monetary Policy”.
EURUSD (Euro vs US Dollar)
Corrective movements we saw for EURUSD last week after 8 bullish weeks in a row. The pair opened at 1.1841 and closed at 1.1795. The economic data in Europe and USA are not really encouraging but USD got very strong after FED session on Wednesday so the pair moved bearishly after hitting weekly high at 1.1965. This correction could be expanded if a bearish breakout of 1.17 takes places but as long as the pair is moving around and close to 1.18, the scenario of the bullish trend continuation and the approach of 1.20 is getting stronger. We’ll try some sell positions this week on EURUSD.
GBPUSD (Great Britain Pound – US Dollar)
It was a consolidative week for GBPUSD since the pair opened and closed almost at the same price, around 1.3090. During the week, we saw prices at 1.3265 which was a multi-month high but the strengthening of USD had as a result, pressures on the pair. There is no serious progress regarding the Brexit issue but the deadlines start to become imperative and according to the USD strength, GBPUSD may try the milestone price at 1.30 this week. Given the above, we’ll open sell positions this week.
USDJPY (US Dollar – Japanese Yen)
A bearish week for USDJPY which opened at 106.61 and closed at 105.80, even if on Wednesday the pair had risen significantly due to USD strength. The 10 years US yield dropped to 0.63% and just because there are no big news and announcements from Japan during this week, the dominating factor will be USD. The milestone price of this period is 105 because a possible bearish breakout could lead to a downtrend pattern. Sell positions is our selection for the current week.
EURJPY (Euro – Japanese Yen)
Bearish was the week for EURJPY after 8 bullish weeks in a row. The pair opened at 126.18 and closed on Friday at 124.81, moving bearishly almost all the week long. The price area around 124.50 is critical and if the pair drops below it, we may see more bearish trends. We’ll try sell positions this week.
EURGBP (Euro – Great Britain Pound)
Marginally bearish was the last week for EURGBP with a weekly open at 0.9040 and a weekly close at 0.9011, confirming the sideways channel for the pair during the last two months. The fact is that the pair holds the price of 0.90 and maybe we’ll see the same sideways movement & low volatility scenario for one more week. Range strategy is our selection this week.
USDCAD (US Dollar – Canadian Dollar)
The downtrend confirmed for one more week on USDCAD, which opened at 1.3242 and closed at 1.3171. The temporary rise of USD on Wednesday was not able to change the outlook of the pair which is in a heavy downtrend since the end of March, from the price area of 1.45. The oil price keeps on rising and many analysts claim that the price of 1.30 is in danger or even the price of 1.2950 which is a multi-month low for the pair. We’ll keep on being sellers for one more week.
USDCHF (US Dollar – Swiss Franc)
We saw a slight bullish reaction for USDCHF last week, with open price at 0.9091 and close price at 0.9115. During the last month, there is a price stabilization around 0.91 so there are many rising voices that state that there could start a recovery after the sharp drop of the last months. On Tuesday, the pair touched the critical area of 0.90 but later on, the USD strength brought it back to the area of 0.91. We’re keen to try buy positions on the current week.
AUDUSD (Australian Dollar – US Dollar)
Consolidative trends on AUDUSD last week since the pair opened and closed around the price area of 0.7160. Data from Australia and China did not have a strong positive or negative sign. The current price levels maintain the uptrend profile for the pair but if a possible USD strengthening cause a result for the pair to drop below 0.71, then the probability for a further correction is higher. We’ll try some sell positions on AUDUSD this week.
SP500
Bullish was the last week for SP500, which closed at 3,392 points (very close to the all-time highs price in last February) and profits like 0.85%. The uptrend continues in the US stock markets despite all the concerns regarding COVID-19 and the global tensions. Obviously, the liquidity caused by the huge money supply during the last time, favours the markets and early this week the futures of SP500 have already conquered the castle of 3,400 points. Many eyes will fall this week on the Jackson Hole symposium as the investors await some more information for the monetary policy in the next months. It is very difficult to stand contrarian in such a strong uptrend but due to overbought levels, corrective movements cannot be excluded. We remain buyers for one more week.
DAX30
On the contrary with the US stock markets, DAX30 was marginally bearish last week and closed at 12,793 points and losses close to 0.4%. There is an obvious difficulty of breaking out the levels of 13,000 points but on the other hand, DAX30 seems to be resistant to a decline. There is high probability for maintaining and expanding from the current levels, maybe trying 13,000 points again so long positions is our view for the current week.
FTSE100
Bearish movements we had for FTSE100 last week as the Index closed at 6,013 points, about 0.90% lower. There was a bullish reaction and a wave of buyers below 6,000 points and as long as FTSE100 is above this level, there is a good chance for higher prices. Long positions will be our selection for this week.
Gold
It was the second in a row corrective week for gold, after the crazy rally of the recent period. The week closed at $1,1947 and losses like 0.30% but the volatility is still very high since before last Wednesday and after the strengthening of USD, gold had climbed above $2,000 again. Gold is obviously affected by the huge money supply, from COVID-19 and from the latest updates on the geopolitical area but the uptrend has not been distorted so far. The price area around $1,875 is critical because as long as gold is moving above it, the probability of reaching the level of $2,000 is high. Having this in mind, we’ll try long positions.
US Oil
Slightly bullish was the last week for oil futures with a weekly close at $42.26 and marginal profits like 0.16%. Oil had a clear uptrend until the middle of the week but it affected from the strong USD. The world economy slowing keeps on bringing concerns regarding the demand recovery but recently some other problems occurred because some OPEC members are accused that increased the production, beyond the agreed. We need to have a solid bullish breakout of $43.50 in order to establish an uptrend and if we look lower, the price area of $41.50 is also a strong support. This range, between $41.50 and $43.50 is also very possible to maintain for one more week so range strategy is a good selection for us.
Bitcoin
Corrective was the last week for Bitcoin which closed at $11,645 and losses of 2.25%. There was a failure of staying above $12,000 but many valid analysts claim that we are in the verge of a big uptrend because there are some common patterns with the big uptrend, back in 2017. Bitcoin also has to fight with some other cryptos which outperform lately and gather huge assets from the investors. In the short term though, the current correction may expand to $11,200 but based on the positive momentum, a possible breakout of $12,000 could potentially launch the Bitcoin to much higher levels. We’ll trust a further correction this week and we’ll open short positions.
