06/04/2020

General Comment

Another week passed by and the markets have been dominated by the coronavirus pandemics. Volatility was significantly lower though. USD was very strong again and we need to underline the rally of the oil prices ahead of OPEC meeting. The death growth ratio was lower this weekend for the first time and it is a beam of light for the investors’ expectations even if the real results in the global economies will be visible much later.

EURUSD

EURUSD returned to its downtrend, having a bearish week that opened above 1.11 and closed a bit above 1.08. USA had an impressive growth on Unemployment Rate in March, from Οι 3.5% to 4.4% but it didn’t help the recovery of the pair which had all five days of the week bearish. In Eurozone, economic news (mostly PMIs) were not positive at all so it’s possible to see a downtrend continuation. We’ll open sell positions this week, keeping our eyes on the price area that the pair was last month and on the support of 1.0635. This week, we also have our eyes on FOMC Minutes on Wednesday and at the new Initial Jobless Claims on Thursday (are we going to see a new record above 6,6M new claims this week?) while in Europe it will be critical the ECB Monetary Policy Meeting Accounts on Thursday. Obviously, all investors keep their eyes on the Europe’s political issues which has risen again along with the crisis and affects negatively the expectations for a strong EUR.

GBPUSD

Bearish was the last week for GBPUSD but the volatility was much lower. From 1.2418 on Monday, the pair closed at 1.2268 last Friday. The very first days of the week were rather neutral and the drop has to do with the heavily bearish movement on Friday with the Services PMI announcement in UK which had a lower value than expected. Both USA and UK are in the center of the coronavirus pandemics this period with an important growth in cases & deaths but it seems that investors favor USD again. We may see a further drop of the pair and the next visible support is at 1.20 so sell is our selection for this week. The increased risk though favors USD at this stage.

USDJPY

It was a bullish week for USDJPY but the volatility was lower compared to the previous weeks. The weekly open was at 107.67 and the weekly close at 108.36 but early this Monday we can see a heavily uptrend and the pair is moving above 109. The Japanese economic announcements were not disappointing, the 10 years old US yield dropped but still the pair has a rising momentum. In case that we’ll see positive news from coronavirus case, USDJPY may show a strength and return back to prices above 110. We’ll open buy positions this week, targeting 110 at the first place.

EURJPY

EURJPY escaped from its low volatility and the sideways movements that had the last weeks and it had an important drop from 119.54 to 117.20. EUR appeared quite weak but it seems that the resistance price of 116.50 is not easy to be broken. Early this Monday, the pair has a heavy uptrend and maybe it will enter into the well know price channel between 118 and 120. We’ll open buy positions this week but we may turn them to sell positions if the pair is not able to surpass the price of 120.

EURGBP

Second week in a row with heavily bearish movements for EURGBP which opened at 0.8920 and closed at 0.8809. During the week, the pair dropped even more but the bullish Friday caused the recovery above 0.88. The downtrend rally that has started from 19/3 does not have a strong fundamental basis so we may see a recovery continuation up to 0.90. Buy positions is our selection for the current week.

USDCAD

Bullish was last week for USDCAD with a weekly open at 1.4013 and a weekly close at 1.4197, even if the oil prices rallied and this fact shows the strength of USD. The pair is an uptrend channel since the beginning of the year and it’s possible to carry on like this. Important & critical role will have the Unemployment Rate announcement in Canada for the month of March since we’ll have a better idea on the coronavirus impact on the Canadian economy. We remain buyers on USDCAD.

USDCHF

An important recovery we saw for USDCHF last week with an open price at 0.9527 and a close price at 0.9753. This currency pairs tends to move to the average of the last weeks price channel between 0.93 and 0.9850 so if we don’t see a bullish breakout of 0.98 (which will mean a clear uptrend), we may see a return to the price area of 0.9630. We will open buy positions above 0.98 but sell positions in case of breakout difficulties.

AUDUSD

A clearly bearish week for AUDUSD since from 0.6150, it ended the week on Friday at 0.5990. The Chinese results had an impressive recovery, the Caixin PMI had a value above 50 in March again (in February the value was at 40.3). The news did not trigger a bullish rally for the pair and it means that AUD is weak compared to USD. Early this morning, AUDUSD has recovered 0.60 again and it is moving close to 0.6050 but a bearish breakout of 0.60 will trigger the sellers. A possible positive mood in the markets may strengthen the pair temporarily. We’d better stay out this week.

SP500

Slightly bearish week for SP500 with losses like 1.6% and a weekly close at 2,479 points. Of course, such a weekly percentage drop is obviously lower than the movements that we got used from the Index in the last weeks. Early this Monday, the futures of SP500 are in a rally with profits close to 3.5% and if we see a bullish breakout of 2,640 points we may talk about a return to an uptrend. On the contrary, a return below 2,450 points will trigger the sellers and it may mean a return to the downtrend. The markets is moving clearly from moment to moment driven by the coronavirus news so only opportunistic trades, both long and short, are favored.

DAX30

A barely noticeable change we had in DAX30 last week which closed circa 9,500 points. The futures of the Index perform profits more than 4% and if we see a clear surpass of 10,000 points, we may see a strictly different scenario compared to the heavy downtrend of the last weeks.

FTSE100

A slightly bearish week we saw for FTSE100 with losses close to 0.7% and a weekly close at 5,372 points. Very good profits for the futures of the Index right now (close to 3%) but we need to see a bullish breakout of 5,770 points before we open long positions. On the contrary, a bearish breakout below 5,300 points would mean a return to the downtrend of the last weeks.

Gold

Last week closed with light losses for gold prices, close to 0.4% and a weekly close at future prices at $1,647.5. It seems that gold has entered a price channel between $1,580 and $1,700 because it gathers a lot buyers as a safe-haven & low-risk asset but on the other hand, USD was strong and it does not let gold to perform a heavy rally (we should not forget that gold in denominated in USD). The highest probability converges to the scenario that gold will remain into the aforementioned channel even if technically we have seen bearish patterns.

US Oil

Very important profits for oil prices we had last week since this Monday 6/4 is scheduled the OPEC meeting with Saudi Arabia and Russia we had started a trade war recently to be in the center of a possible solution. President Trump, last Thursday stated that there is an optimism for a solution and the rumors that this solution will contain production cut, triggered a rally for oil prices with weekly profits of 32% and a weekly close price at $28.76. This rise is one of the biggest weekly percentage rises of all times but it takes a lot of attention because the geostrategic stabilities are very vulnerable. President Trump with new statements last Saturday accused OPEC for opportunistic behaviors and cartel. With such erratic news and ahead of OPEC meeting, we’d better wait and see.

Bitcoin

Profitable was the last week for Bitcoin which opened at $5,880 and closed at $6,775 with a weekly performance above 15%. During the week, the price exceeded $7,000 but very quickly we saw a pullback below this level and after that, we saw many failed attempts for a breakout again. If Bitcoin is able to surpass clearly the price of $7,000, we’ll open buy positions. In case of failed attempts again, we’ll try sell positions, targeting the price area of $6,000