07/09/2020
General Comment
Last week closed with the Unemployment Rate announcement on Friday and the news were relatively impressive and unexpected. Markets expected the rate at 9.8% in August but the result was 8.4% so the already started USD recovery had a continuation. Moreover, the correction is the US stock markets was significant while gold and oil had serious losses as well. Many analysts render these results to the next stimulus package from FED which may be lower than expected because there are now certain hopes that the COVID-19 vaccines will be reliable and into 2020 and it will mean the end of the pandemic. The current week contains important scheduled news such as the GDP announcements in Germany, Eurozone and UK and the Interest Rates along with the Press Conference in Eurozone on Thursday.
EURUSD (Euro vs US Dollar)
Bearish was the last week for EURUSD which opened at 1.19 and closed at 1.1836 since USD appeared strong during the week. The pair is in a critical crossroad because a possible bearish breakout of 1.1760 will put the latest uptrend to the test. On the contrary, as long as EURUSD stays above 1.1760, the probability of reaching 1.19 again is high. The current Monday is a public holiday in USA (Labor Day) but from Tuesday and on we may have high volatility again. Also, there is a critical expectancy to Christine Lagarde’s speech in ECB session this Thursday because there is a probability that she may try to defend a looser and weaker EUR to the US dollar. Below 1.1760 we’re keen to try short positions but in any bullish turns, we’ll open long positions.
GBPUSD (Great Britain Pound – US Dollar)
It was a slightly bearish week for GBPUSD which opened at 1.3334 and closed at 1.3282. The pair had some pressures by the end of the week since there were statements from the BoE that due to COVID-19 there may be a further monetary easing. GBPUSD was already in overbought levels even if the Brexit news do not align to such a strong GBP. In case of a further USD recovery and if the pair breakout bearishly the price of 1.3175, then prices close to 1.30 is not something exceptional but as long as GBPUSD stays above 1.32, the long-term uptrend still stands. Below 1.3175 our positions are short but above 1.32 and in bullish movements our positions are long.
USDJPY (US Dollar – Japanese Yen)
Bullish was the last week for USDJPY, with a weekly open at 105.44 and a weekly close at 106.22. It is a confirmation that the pair is in a sideways movement during the last weeks, into a channel between 104.20 – 107, without an obvious trend. The US 10 years treasury yield which is highly correlated with USDJPY performs a slight rise to 0.72% but the pair need something stronger in order to break the aforementioned channel. A possible further USD strengthening needs to a conformation of breakout of 107 in order to define an uptrend and we’re keen to try it by opening buy positions this week.
EURJPY (Euro – Japanese Yen)
Bullish was the week for EURJPY which opened at 125.44 and closed at 125.74, tolerating the pressures that took place by the end of the week. The pair has done several attempts to remain above 126 without success and as long as it fails, the correction probability is high. In a case of success, then there is a threat to a multi-month high price, above 127. Sell positions is our selection for this week.
EURGBP (Euro – Great Britain Pound)
We saw a rather neutral week for EURGBP which opened and closed a bit above 0.89. The price of 0.8865 is meant to be a strong support for this period and a possible GBP weakness may bring the pair to the price area of 0.90 again. We will try buy positions this week.
USDCAD (US Dollar – Canadian Dollar)
Bearish was USDCAD for one more week (7th in a row) but there were some recovery signs since the mid-week and on, mostly due to strong USD and due to strong pressures on the oil prices. The weekly open was at 1.3091 and the weekly close at 1.3061 but the weekly low price was below 1.30. A milestone price for the pair is at 1.3160 because above this level, the uptrend/recovery scenario is strong. Under this consideration, we will try buy positions this week.
USDCHF (US Dollar – Swiss Franc)
Strong bullish reaction performed USDCHF last week since from 0.9033, it managed to surpass 0.91 and to close at 0.9133. The pair is resistant above 0.90 and next target of a possible recovery for our buy positions is the price area of 0.9240.
AUDUSD (Australian Dollar – US Dollar)
We saw the first strongly corrective week for AUDUSD after at least ten weeks. From an open price at 0.7357, the weekly close on Friday was at 0.7282. USD which strengthened and the drop at the commodities prices (mostly on gold) had this result and if the correction carries on below 0.7140, then we may even speak for a bullish trend reversal. On the contrary, if the correction stops, it will be a threat to the 3 years high price above 0.74. Trusting more the first scenario, our selection for this week, is sell positions.
SP500
Strong bearish trends in the last two days of the previous week for SP500 and as a result it closed at 3,415 points, performing losses like 2.6% on a weekly basis. Having risen at eight out of the last nine weeks, some may say that such corrections are expected and the tech companies were the leaders in the drop. A possible lower package of economic aid in combination with the expectancies of a democrat president at the next November’s US elections may result a further correction but the long-term uptrend has not been hurt so far, especially when there are still negative rates and there are no alternative investment solutions. Trusting a further correction, we will open short positions this week.
DAX30
Bearish was the last week for DAX30, closing below 13,000 points, at 12,967 points and weekly losses more than 0.7%. The outlook of the Index though was quite better than the US stock markets Indices and this gives a tone of a recovery hope above 13,000 points again. Long positions is our preference this week.
FTSE100
Strong pressures for FTSE100 last week with a close price at 5,832 points, almost 2.5% lower. Simply, we had a confirmation of the negative outlook of the Index and a possible drop below 5,770 points may cause more negative tendencies and views. We’ll go short this week on FTSE100.
Gold
It was a week that caused pressures on the gold prices, with a weekly close at $1,940 and losses close to 1.7%. The strengthening of USD along with a wind of optimism for fast delivered and reliable vaccines for COVID-19, pressed the gold prices, without hurting so far, the uptrend momentum seriously. Gold prices below $1,908 or even more, below $1,874 will create serious concerns for the uptrend, otherwise the price area of $2,000 will remain a very realistic target which in a mid to long term horizon can be exceeded for good. Long positions sound like a good option for the current week.
US Oil
Big drop for oil futures prices last week with a weekly close at $39.47 and losses that exceeded 8%. The oil price dropped below $40 for the first time in the last three weeks due to global concerns of the world economies recovery and due to serious concerns for the demand recovery. Bloomberg broadcasted that Aramco may offer discounted prices in Asia (for the first time after June) and USA and maybe in Europe as well. This picture may put to the test the next supports at $37 and $34.50 so we’re keen to try short positions.
Bitcoin
Very big correction for Bitcoin prices last week, since the close price was at $10,260 and the losses surpassed 12%. A few weeks ago, Bitcoin had touched $12,500 but since then, there was no continuation. It takes prices below $10,000 though, in order to have a clear view for an uptrend reversal for Bitcoin. This uptrend started at the end of July but a -12% performance on a weekly basis is something that creates serious concerns. Below $10,000, some sellers would target the price area of $8,100 but a possible recovery, may lead the most popular crypto in the world in the price area of $12,000 again because many investors will see this correction as an opportunity to buy. Long positions is our option for the current week.
