13/01/2020
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.
EURUSD
EURUSD opened last Monday at the price of 1.1165 and with a bearish trend it closed at 1.1120. The image of the week was mixed: bullish Monday, bearish Tuesday & Wednesday, uncertainty on Thursday and bullish trend on Friday. This image reflects the relief regarding the Middle East crisis between USA and Iran as well as the negative news from the US jobs market since the new US job positions were 145K on December versus expectations for 164K. Also, it seems that there’s an actualization and implementation of the agreement between USA – China and the trade war. It is scheduled this week for both parts to meet and sign the phase one of the agreement. The current week, mostly the last 3 days contains very important announcements for both US and European economies and so a high volatility is expected. Our general estimations for a weak USD have not changed that much so it’s possible to watch a bullish trend for EURUSD this week. Our buy positions will have a target the price area of 1.12. A possible bullish breakout of 1.12 maybe smooths the way for prices close to 1.14 in a long-term class.
GBPUSD
Slightly bearish was last week for GBPUSD since the pair dropped about 20 pips with a weekly open at 1.3079 and a weekly close at 1.3058. Only last Monday was bullish while the rest of the days were smoothly bearish. This drop has to do with some fears regarding the Brexit agreement implementation but mostly to the speech of Mark Carney (Bank of England) on Thursday with sideswipes for rates cut. The morning of the current day there’s a series of important announcements for UK economy that may define the trend of the whole week. Also, we need to underline that GBPUSD opened this week with a bearish gap about 20 pips. The point is that 1.30 seems to be a strong support for the moment, even under Carney’s speech last Thursday, the pair reached the price of 1.3013. The uptrend seems healthy so far so a bullish reaction makes sense and we’ll try buy positions, targeting the area of 1.32. Of course, we’ll wait the early morning Monday announcements, especially the Industrial Production and GDP for November before we act.
USDJPY
A very volatile rise for USDJPY took place last week which was a total recovery of the previous big drop. By opening at 107.82 and close at 109.49, the profit was above 1.5%, combined with high volatility levels. Characteristic instance of the high volatility was last Wednesday which opened at 108.41, dropped to 107.64 and finally closed at 109.10, a trip of 150 pips. The weekly rise somehow broke due to the negative results of NFPs and the Unemployment Rate in USA while the price had climbed up to 109.68, very close to the critical resistance of 110. This resistance is a milestone for the pair because there are several failed attempts of a breakout the last weeks so the probability of a correction is increased. This Monday, USDJPY has opened with a strong uptrend and the price is moving above 109.50 which is the last bulwark before 110 and no safe estimation is possible for the moment. Traders & investors are moving away from safe solutions such as JPY after the appearing outlet in Middle East but on the other hand weak USD does not confirms this trend. We prefer sell positions, targeting 108.70 but a breakout of 110 is a game changer for the pair and in this case, we’ll open buy positions.
EURJPY
High profits for EURJPY last week with a weekly open at 120.41 and a weekly close at 121.78 (profit above 1.1%). With the exception of last Tuesday, all the other days were bullish and traders are moving away from safe-haven assets like JPY due to the peacefulness of the situation between USA – Iran. Now the resistance of 122.40 is on target which a price area of a multi-month high for the pair. There is a strong probability that for an approaching of this level but it takes special attention because the speech of Haruhiko Kuroda (Bank of Japan) is able to get things upside down. We’ll try buy positions though, with main target the price area of 122.90.
EURGBP
It was a slightly bearish week for EURGBP with a weekly open at 0.8527 and a weekly close at 0.8511 but it does not mean that there were no volatile movements during last week. The first three days were bearish and lead the pair until the price of 0.8454 while the next two days were bullish and that is why we had the bespoken result. The expectations were positive for a stronger uptrend after the prelude for a dovish policy from Bank of England which makes GBP even weaker. It means that there are high hopes, especially if we have positive updates from Brexit, to see the pair significantly lower that is why our selection this week is to open sell positions, targeting 0.8450.
USDCAD
It was a week of a bullish reaction for USDCAD after a sequence of 6 bearish weeks that brough the pair below 1.30. From the price area of 1.2985, we saw heavy uptrend days (the drop of oil prices helped a lot) that recover USDCAD even above 1.31 but we also saw a little decline on Friday since the news for the Unemployment Rate in Canada in December were really good: 35,200 new job positions against expectations for 25,000 and the Rate fell from 5.8% to5.6%. These data and the whole attitude of the pair show us that this bullish reaction will carry on so we’ll try buy positions this week with 1st target the price area of 1.3110 and maybe 1.33 long-term.
USDCHF
We saw a light bullish reaction for USDCHF last week after a series of 5 bearish weeks in a row. The weekly open was at 0.9704, we saw weekly low on Wednesday at 0.9664, weekly high on Friday at 0.9761 and a weekly close the same day at 0.9727 due to USA NFPs. The light bullish reaction was not able to persuade us for an uptrend continuation but on the other hand there are no fundamental reasons (maybe except the weak USD) to see prices that we had not seen since September of 2018. The action of “wait and see” seems to make sense for the moment.
AUDUSD
It was the second in a row bearish week for AUDUSD which started last week at 0.6940 and closed at 0.6897. Only last Friday was bullish and it has to do with the NFPs announcement from USA. Given the intentions of the bank of Australia for a Quantitative Easing policy into the current year and given that the indescribable disaster from the huge fires all over the country there are serious estimations from big banks and institutes that see AUDUSD significantly lower, maybe close to 0.65 during this year. For the moment, we saw some attempts for a recovery of 0.69 after the Securities Inflation announcement of 1.4% in Australia but currently AUDUSD has dropped again below 0.69. Also, the the affairs between USA and China seem to get better and AUD which is traditionally affected by China’s news has a single reason for optimism. In any case, it’s very difficult to see prices above 0.70 and sooner or later AUDUSD is expected to follow its heavy downtrend, that is why we will open sell positions, targeting the price area of 0.6770.
SP500
The bulls are still here, alive and kicking for SP500. With a weekly open of 3,219 points and a weekly close at 3,263 points, profits were circa 1.4% which means that nothing has changed and under the current data, no strong correction is visible in the near future. Of course, the consecutive all-time highs create conditions for overbought zones but how can we resist to the fact that during the last 14 weeks we had a total profit above 12%, and 12/14 bullish weeks and only 2 weeks slightly bearish? As we have mentioned in the past in such cases of uncharted territories, only the round milestone numbers are psychological levels of support and resistances. The next relative level is the 3,300 points which will be the take profit price of our long positions this week.
DAX30
Strong profit like 2.5% had last week for DAX30 which opened at 13,110 points and closed at 13,445 points. During the week we saw high prices at 13,541 points and now the all–time high of 13,600 points from January, 2018 is threatened. We estimate that the fundamentals of the German stock market do not justify something like this so the reasonable behaviour of the Index is to see corrective trends. We’ll open short positions, looking for a target close to 13,300 points.
FTSE100
Consolidative attitude we had last week for FTSE100 with alternations between bullish and bearish days. There is some evidence for an uptrend but in the same time we see attempts for approaching 7,500 points again. We cannot have clear conclusion so we’d better stay out this week.
Gold
Last week was somehow bearish for gold which opened at $1,559 and closed at $1,562.5 with profit circa 0.22%. The volatility was very high, especially last Wednesday where we saw highs at $1,611 and lows at $1,552. The relief of the crisis between USA and Iran helped a lot to the drop of the gold prices which is considered the most safe-haven asset in the world during crisis periods. The week would have close rather bearishly but the weak USD due NFPs on last Friday removed this option. The crisis relief seems to solidify so maybe a bigger correction is able to take place this week. Our selection is to remain sellers with target the price area of $1,533.
US Oil
We witnessed a huge drop of oil prices last week. Us Oil opened at $63.77 and closed at $59.13 with losses greater than 7%! It is obvious that calm tones to the relationships between USA and Iran were critical. If this drop continues and if there is a bearish breakout to the price of $58.30, then we can say that a total restoration took place and the next target would be $55. On the contrary, a possible bullish breakout of $61.70 would mean that the uptrend that has begun from early September is about to continue. This second scenario has significantly lower probability compared to the first one but there’s also a consolidation scenario for a range between $58 and $60, so we will prefer small & opportunistic trades this week with a range strategy between the limits of this zone.
Bitcoin
Important weekly profit for Bitcoin last week. We had not seen such a weekly % change for a long series of weeks. With a weekly open at $7,352 and a weekly close at $8,181 we had percentage profits above 11%. Such weekly changes used to be ordinary and frequent for Bitcoin but we saw a big volatility decline for 6 weeks in a row. The breakout of technical & psychological resistances as well as the breakout of the price of $8,000 have filled the crypto traders with optimism and now they’re looking for new and higher target. We’ll do so and we’ll open long positions with main target the price area of $8,600 which is the next critical resistance for Bitcoin.
