31/08/2020
General Comment
Last week closed on the echo of Powell’s speech at Jackson Hole Symposium where the general meaning was that the priority will fall on the jobs market recovery while the inflation rate may exceed the limit of 2% annually with the respective low interest rates monetary policy. This fact, triggered heavy pressures on the USD and gave the tone to the whole FX market. The stock markets kept on rising, performing new highs while gold and oil had some significant profits as well. At the COVID-19 issue, we didn’t have any serious developments but this week contains important news and announcements and the heyday is next Friday where we will learn the US Unemployment Rate in August.
EURUSD (Euro vs US Dollar)
It was a bullish week for EURUSD which opened at 1.1792 and closed at 1.1904. Early last week, the volatility was low but during the last days the weak USD boosted the pair. If this mood carries on in the current week as well, obviously the price target of many analysts at 1.20 will take place. This week is full of important announcements for Germany, Eurozone and USA so we may see higher volatility. We will open buy positions, targeting the price area of 1.20.
GBPUSD (Great Britain Pound – US Dollar)
After three consolidative weeks, GBPUSD had an explosively bullish week opening at 1.3083 and closing at 1.3350. Obviously, the weak USD by the end of last week affected the pair but during the previous days the trend was also bullish. In the Brexit issue there are no serious updates but even if the deadlines are tight, GBP appears impressively strong. The general trend since the end of the March is undoubtedly bullish and it is very difficult to contradict it but on the other hand, technically speaking, the pair has reached overbought levels and we may witness corrections. We’ll try sell positions this week.
USDJPY (US Dollar – Japanese Yen)
The weak USD dominated in the markets last week but there was another event that affected and will affect the USDJPY pair: the resignation of the Japanese Prime Minister Shinzo Abe for health reasons. This fact caused a risk-off mood to the investors and this pressed the pair. Finally, the week closed at its open price, into the area of 105.40 – 105.50. The trend is bearish but USDJPY got used to move in a certain range in the last period so we may see a bullish reaction as it is moving close to the lowest limit. A possible bearish breakout of 105 would strengthen the downtrend but as long as the pair is above this level, we prefer buy positions for the current week.
EURJPY (Euro – Japanese Yen)
It was a bullish week for EURJPY which opened at 124.74 and closed at 125.43. During the week, the profit was higher but the JPY strengthening on Friday, limited the bulls. The pair is in an uptrend that may carry on but it is important to see that the price area at 126.75 is a strong resistance up to now. However, our bullish sense remains so buy positions is our selection.
EURGBP (Euro – Great Britain Pound)
Bearish was the trend for EURGBP last week since the weekly open was at 0.8991 and the weekly close at 0.8916. The strong GBP dominates lately and by given the fact that the pair remains steadily below 0.90, we will open sell positions this week, targeting mainly the next support at 0.8860.
USDCAD (US Dollar – Canadian Dollar)
USDCAD moved las week with certain bearish trends since it opened at 1.3171 and closed at 1.3097. It was the seventh bearish week in a row as the oil prices (that affects CAD significantly) rise and USD is weak. The pair is very close to the milestone price of 1.30 and the sellers will try to reach it so we will open sell positions.
USDCHF (US Dollar – Swiss Franc)
USDCHF was weak for one more week, even if it has showed us some recovery signs. The pair opened at 0.9104 and closed at 0.9041. The sellers of the pair are looking for good the milestone price at 0.90 which is also a very strong support and a low price of at least 5 years. We remain sellers but we’re keen to close our positions at 0.90.
AUDUSD (Australian Dollar – US Dollar)
A very clear bullish week took place for AUDUSD, after two consolidative weeks. The weekly open was at 0.7165 and the pair closed at 0.7365 in between the weakness of USD and the commodities price rising that affects AUD a lot positively. Even if the pair has entered in overbought levels, the uptrend is obvious and the expectations for weak USD in the near future, limit the correction probability. We prefer buy positions this week.
SP500
SP500 closed the week with significantly higher prices. More specifically, the weekly close was at 3,506 points and the weekly profits reached the levels of 3.35%. The high prices that we saw last February, before the COVID-19 crisis have been conquered and the US stock markets continue a crazy rally. Of course, we should not forget that as we enter the autumn period, the US elections come closer and the Democrats that lead the polls are considered traditionally as less market friendly government. This fact, combined with some possible profit takings may cause a correction at some stage but in the meantime, the rally continues and we’re keen to open long positions.
DAX30
DAX30 recovered last week and by closing at 13.061 points, managed to surpass the level of 13,000 points and to perform profit above 2%. Now the eyes of the investors are straight to the new resistance at 13,300 points which is a multi-weeks high price for the Index and a realistic target for our long positions this week.
FTSE100
On the contrary to other stock markets behaviour, FTSE100 moved slightly lower last week and closed at 5,980 and loss like 0.5%. The loss of the price level of 6,000 points is considered to be critical and after the UK public holiday at 31/8 (Summer Bank Holiday) we need to see if the drop will carry on or if the Index will be aligned with rest stock market Indices and if it is able to exceed the level of 6,000 points again. By favoring the second option, we’re keen to try long positions this week.
Gold
Positive was the last week for gold which closed at $1,973 and profits close to 1.3%. The weakness of USD and the Powell’s statements for increased inflation definitely favour the high gold prices. Another basic factor of the next period is going to be the US elections but for the moment, the mood of the investors seems to be the reaching of the $2,000 again. Under these conditions, our selection is long positions for this week.
US Oil
Bullish was the last week for oil futures with a weekly close at $42.92 and profits about 1.5%. Oil keeps on moving in a tight price range, between $42 and $43.50 but the active drills in USA, increased marginally in USA for the first time since 12/2019, according to Baker Hughes. The production did not change significantly while the demand remains at the same levels too on a hold mode due to COVID-19. Weak USD has also an important role but oil needs stronger motivations in order to escape from its current price zone. Range strategy is applicable for this week
Bitcoin
Consolidative was the trend last week for Bitcoin which closed at $11,709 and marginal profit like 0.5%. On Tuesday, we witnessed massive sells from Bitcoin owners but the announcements by the end of the week for high inflation in USA, balanced the prices. It is obvious that the latest FED decisions favour the cryptocurrencies but Bitcoin has stuck in the last days around $11,500 causing a delay to the rise that many analysts await. On the other hand, the probability for a drop is limited after the latest events so everybody is trying to see, if and when the expected rise will take place. We’ll try long positions though.
