12/08/2019

IMPORTANT DISCLAIMER

The information of this report is of a general nature only. It is not a personal financial advice. It does not take into account your objectives, financial situation and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.

 

Due to summertime markets don’t have the ordinary depth because there’s no big trading volume. It may cause unusual spikes and traders should be very careful.

 

EURUSD

EURUSD had a strong bullish Monday last week and we took both of our targets of 1.1150 and 1.1190. The last days of the week was rather consolidative but it closed above 1.12 which seems that the uptrend has more fuel to runThe USA – China Trade War still dominates the instrument by producing weak USD. President Trump words prelude a cancellation of the next round of talks in September. 1.1275 is our new target for our buy positions although the squeeze of the last days may prelude a volatility explosion. There is important news for European and US economy this week that most likely will increase volatility as well such as the Euro-zone ZEW Survey Expectations & US Consumer Price Index on Tuesday, the German and Euro-zone GDP on Wednesday, the US Retail Sales Advance on Thursday and the US University of Michigan Sentiment on Friday.

 

GBPUSD

The strong bearish trend of GBPUSD carried on last week, although the beginning was quiet with low range daily bars. The last three days though, were all bearish and on Friday we were very close to our target of 1.2020. Finally, the instrument closed at 1.2027 and we took serious profits although we didn’t hit our take profit price. It seems that there’s no relief from the hard Brexit main scenario and the market waits for political or fundamental news to break the important support of 1.20. The UK GDP that was announced last Friday spread more disappointment. The environment is very fragile though since there are rumours that UK politicians try to avoid the hard Brexit in any wayWe will wait until GBPUSD crossed below 1.20 for good (at least 15-20 pips below 1.20) and we’ll open sell positions, targeting 1.1910 and 1.1850. In the opposite occasion, if we see a strong bullish reaction (meaning that there is some positive news regarding Brexit) we’ll open buy positions with a trailing stop since in such a case, the pair may return back to 1.30 easily. Besides the US news mentioned above, the UK news of the week include the Jobless Claims Change on Tuesday, the UK Consumer Price Index on Wednesday and the UK Retail Sales Ex Auto Fuel on Thursday. The above news though, cannot change the trend of GBPUSD since the Brexit dominates.

 

USDJPY

Last week was bearish, as expected and we took the target of 105.50 since last week’s low was at 105.26. Finally, the pair closed at 105.66. Technically the pair is strongly bearish but our Machine Learning models warn for a reversion. Also, fundamentally, JPY is a safe-heaven asset and many traders may search for a shelter since there are clouds gathering at the world economy. Taking under consideration these issues, we will prefer to stay out this week. A few and minor news for Japanese economy this week: Machine Tool Orders on Tuesday and Machine Orders on Wednesday are the most important ones.

 

EURJPY

Although the volatility was increasing, the last days of last week were quiet and we couldn’t hit our target of 115.60 although the week closed at 118.37 and our positions were in the money. We avoid staying with opened positions during the weekend because the risk is too high. Definitely the price of 118 is a hard support but if there will be a breakout of this price, we’ll hunt our last week’s target of 115.60 for our sell positions. EUR is still very weak and only unexpected news for the European economy (mentioned at the EURUSD analysis) may change the outlook of the pair. According to this reason, our positions will be low-risk

 

EURGBP

The furious uptrend of EURGBP is still on. Our last week’s target of 0.9240 was easily taken and the pair closed at 0.9312. No serious signs of recovery since the hard Brexit is still there but our Machine Learning models show signs for possible reversal. Since we’re at a very important resistance of the area above 0.93, we’ll stay out this week. The last years, two more times the pair reached this area (10/2016 and 8/2017) and both of the times there was a strong pullback. We need to go back to 2009 in order to see prices significantly above 0.93.

 

USDCAD

The uptrend that we estimated last week, took place the first two days but it was enough to give us profits from both of our targets: 1.3270 and 1.3330. Last Thursday was very bearish and finally the pair closed at 1.3220. We still believe in our bullish scenario and we will follow it by opening long positions, targeting 1.3290 and maybe 1.3350. Just a few important news for the Canadian economy this week: Existing Home Sales on Thursday and International Securities Transactions on Friday.

 

USDCHF

The weak USD dominated last week as we had successfully estimated. Last week’s low was at 0.9691 which allowed us to take both of our profits: 0.9775 and 0.9720. 0.97 seems a strong support so we will wait a breakout before we open new sell positions, looking for target at 0.9620 and maybe the price area of 0.9560. No important news for Swiss economy this week, USD will dominate to the pair but we must be very careful of big spikes due to low summertime volume.

 

AUDUSD

AUDUSD had a strong bullish reaction after last Wednesday’s low at 0.6676 and it closed at 0.6779. Our first target of 0.6710 was reached but we couldn’t take the second target of 0.6650. The point is that the recent dovish comments from RBA add bearish pressure to the pair so we don’t see any recovery for the moment.AUDUSD is very affected from the USA – China Trade War and a global fear of new a recession is very strong.Our sell positions will target 0.6650 again since our Machine Learning models keep on supporting the downtrend. NAB Business Confidence on Tuesday, Westpac Consumer Confidence on Wednesday and above all the Unemployment Rate on Thursday are the important news for Australian economy this week that along with US news may cause high volatility.

 

SP500

After a bearish beginning that lead SP500 at the price area of 2,776 points, the Index recovered seriously and closed at 2,922 points. We took both of our targets (2,880 and 2,825 points) before the recovery take place. It seems like a new bullish trend for SP500 and we’ll follow it by opening long positions that target below the important resistance of 3,000 points.

 

DAX30

DAX30 had a serious recovery after the week’s low at 11,445 points which allowed us to benefit from both of our targets: 11,600 and 11,520 points. Our Machine Learning models support this recovery as well so our long positions looking for 11,850 points and maybe 11,920 points.

 

FTSE100

FTSE100 had quite similar behaviour as the main world Indices: bearish beginning (that allowed us to take our target at 7,240 points) and strong bullish reaction the last days of the week. We’ll favour this scenario by opening long positions with main target 7,350 points and 7,440 points.

 

Gold

Gold’s crazy rally carried on and we took both of our targets of $1,465 and $1,490. Gold exceeded $1,510 last week until it returned below $1,500 again. Gold is the most popular safe-heaven asset and since the USA – China Trade War preludes bad news for the global economy, traders will keep on trusting it. Some banks support a recession scenario which makes the trust to the Gold even higher. We don’t want to get into troubles with important resistance of $1,500so we’ll wait for a breakout and then our long positions will target $1,525 and $1,560.

 

US Oil

US Oil last week, reached a few cents above $50 ($50,46 was last week’s low) and then it had a bullish reaction. Finally, it closed at $54,10 but both of our targets ($54,30 and $52.70) were already taken. Although the Middle East and Iran clouds didn’t fall apart, it’s very difficult for the asset to drop below $50, so our strategy this week will be a range trading strategy between $50 and $55 (short close to $55 and long close to $50) but our trades will be low-risk and opportunistic.

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