20/04/2020
General Comment
Another week passed by and the markets moved through coronavirus pandemics and its consequences in the global economies. Europe seems to be in a better shape since Italy and Spain have significantly lower numbers of cases and victims but in USA, the peak has not taken place yet. There was an important decrease of the volatility in FX markets while the stock markets were rather bullish. There is a European Council Meeting on Thursday that may trigger developments and may affect EUR. Finally, we need to underline that the oil demand is getting lower and lower and as a result we had new price drops.
EURUSD
Bearish was the last week for EURUSD, which opened at 1.0942 and closed at 1.0870. This drop came along with low volatility and USD strength, mostly due to Trump’s statements for an economy restarting plan. In parallel, there are some promising news from medicine researches regarding the coronavirus cure. This week, there are the April PMIs announcements in USA, Eurozone and Germany but it seems that USD has a stronger momentum. We’ll open sell positions this week, targeting the price area of 1.08.
GBPUSD
Marginally bullish was the last week for GBPUSD with a weekly open at 1.2454 and a weekly close at 1.2493. It is important to mention that the pair could not manage to close above the milestone price of 1.25, which is the equilibrium price at this period. UK is maybe the only big country through European countries with increasing numbers of cases and deaths by the pandemic while we can see some clouds gathering due to Brexit comeback. As long as the pair remains below 1.25, the probability of a further drop is getting higher so we’ll open sell positions, targeting the price of 1.22.
USDJPY
Slightly bearish week for USDJPY, which opened at 108.37 and closed at 107.52. The pair’s outlook during the last week was rather consolidative with alternatively bullish and bearish days. The 10 years US yield moved lower last week and currently it is moving around 0.64%. In the beginning of the current week, the pair seems stronger but without a clear breakout of 108, the uptrend is not solid. Probably, we’ll witness the continuation of a sideways movement that is why we’ll favour the range strategy for this week.
EURJPY
Important drop for EURJPY last week since the weekly open was at 118.58 and the weekly close at 116.90. The downtrend is obvious even if it is not very sharp and most likely it will carry on. We will open sell positions this week but we need to pay special attention because the price area of 116.50 is a strong support for the pair and it may trigger bullish reactions.
EURGBP
Another bearish week for EURGBP (the 4th in a row). The pair opened the week at 0.8768 and closed around 0.87. From the beginning of the month, the volatility is very low so it makes sense to see an explosion at some stage. From 19/3, there is a visible downtrend that we’ll follow by opening sell positions.
USDCAD
Weak rise for USDCAD last week with a weekly open at 1.3924 and a weekly close at 1.40. The price of 1.40 has become very critical the last days because the pair cannot escape far away from this price, either up or down. The oil prices tumble so CAD may have serious pressures. In that case, we’ll see a rise for the pair and above 1.41, we’ll try buy positions.
USDCHF
It was a neutral week for USDCHF which closed at 0.9668, just 11 pips above the weekly open. The volatility decreased a lot too and during the last weeks the pair oscillates around 0.97. Most likely, the pair will do the same on this week as well, so we prefer range strategy positions.
AUDUSD
Neutral was the last week for AUDUSD with a weekly open at 0.6361 and profits of about 20 pips. Last week’s China results were unprecedented but expected: 2020 Q1 GDP lost 6.8% on the annual basis and the Retail Sales in March were 15.8% lower. Early this Monday, PBoC cut the rates from 4.05% to 3.85%. This fact caused a temporary drop for the pair down to 0.6336 but in the next hours we saw a recovery and it’s currently moving at 0.6358. The resilience of the pair may favour the uptrend of the last month so we’ll open buy positions, targeting the price area of 0.65.
SP500
Another bullish week for δείκτη SP500 with a weekly close at 2,867 points and profit close to 3%. It was the 4th in a row bullish week and the markets consider that there is hope. Trump’s statements about the economy restart and the hope for efficient medicine against coronavirus fulfills the investors with high hopes. A possible continuation of this view may cause a further Index rise so we’ll try long positions with main target the area of 2,950 points.
DAX30
It was a bullish week for DAX30 which closed at 10,705 points and profits circa 0.35%. The uptrend seems to carry on with 4 weeks in a row bulls but the profits and the volatility of the Index are getting lower. We remain buyers but we’ll decrease our size.
FTSE100
Marginally bearish week for FTSE100 which closed at 5,811 points and losses of 0,8%. The stock markets globally are bullish but the behaviour of FTSE100 causes second thoughts. We may see corrective reactions in the following days so we’ll open short positions this week.
Gold
Importantly bearish was the last week for gold prices. The weekly close was at $1,694 with weekly loss more than 2.5%. There is a tone of optimism regarding the coronavirus medicine treatment in combination with a step-by-step lockdown abrogation that increases the risk mood and causes pressures to the prices of gold. We will open short positions and we’re keen to take the profit at the next important support, close to $1,645.
US Oil
We are watching the absolute breakdown of the oil prices day by day. The week closed at $18.18 and losses of 21% while early this week, the drop continues in the same tension and the black gold price is trading close to $15! In the long–term, we’ll see the oil price recovery since the futures have prices even above $30 the next months. For the moment though, the demand is falling sharply, the price is keep dropping and we’re curious to see where the free-fall end can be. The OPEC’s agreement, corrected the price temporarily in the end of March but after that, we saw heavily bearish trends. Short will be our selection for one more week.
Bitcoin
Another bullish week for Bitcoin, the 5th in a row but obviously the volatility is getting lower and the profits weaker. More specifically, Bitcoin opened at $6,908 and closed at $7,126, having performed profits more than 3%. We’re getting closer to the May’s halving (from 11/5 and on, every 10 minutes, miners will be rewarded 6.25 Bitcoins instead of 12.5 which is now), the crypto investors are in a buying mood, since the supply will be lower, but not in the scale of the previous times. The expected and reasonable reaction is a price rise until halving but there are certain concerns and doubts for the next day.
