13/07/2020
General Comment
With no important news & announcements, last week rather moved through the COVID-19 updates. Especially in USA, the number of daily cases is extremely high and some fear movie scenarios for a second lockdown rise but in the same time occasional good news from treatment and vaccines feed the risk mood. The current week, indeed is more active into scheduled news since we have the GDP announcements in UK and China, the Consumer Price Index in USA and Germany, Interest Rates in Eurozone, Japan and Canada and the Unemployment Rate in UK and Canada.
EURUSD (Euro vs US Dollar)
It was the 3rd in a row bullish week for EURUSD which started from 1.1240 and close around 1.13. A critical point during the week was the optimism caused by Gilead that announced that remdesivir is able to decrease the death rate from the coronavirus. Early this week, the pair is moving clearly above 1.13 so we’ll try buy positions, targeting the last months’ highs at 1.1422. On the other hand, a risk-off mood may bring EURUSD below 1.13 and it may trigger a sideways movement to the developed tight channel of the last weeks. Next Thursday and Friday are important in Europe since there is the Interest Rates announcement (along with the press conference) and the EU Leaders Special Summit.
GBPUSD (Great Britain Pound – US Dollar)
We saw another heavily bullish week for GBPUSD which started at 1.2461 and ended at 1.2620. The Brexit issue remains stuck without significant progress so this uptrend has to do mainly with the weak USD. The pair has obtained a momentum and since it may try the 2 months highs at 1.2813, we will prefer buy positions for one more week. We also expect high volatility in a week full of important announcements for UK (GDP, Inflation, Unemployment Rate).
USDJPY (US Dollar – Japanese Yen)
Last week closed with a correction for USDJPY which opened at 107.44 and closed at 106.92. The point is that the important resistances of 106.50 and 106 still stand. The 10 years old US treasury yield has been stabilized and currently moving at 0.64% but if the obvious weakness of USD cause a drop to the pair below 106.50, maybe USDJPY will take a downtrend outlook. We’re keen to open sell positions close to 106.50 though. On Wednesday there is the Interest Rates announcement in Japan with no expected changes from the current price of -0.1%.
EURJPY (Euro – Japanese Yen)
A practically neutral week was for EURJPY since the open and the close price were almost the same at the area of 120.75 – 120.80. The respective volatility though was not low and the pair had weekly lows at 120.27 and weekly highs at 121.97. There is a developed uptrend during the last 3 weeks and we may see EURJPY even higher so we’ll try buy positions, targeting the price area of 122.
EURGBP (Euro – Great Britain Pound)
It was a bearish week for EURGBP with a weekly open at 0.9010 and a weekly close at 0.8951, confirming the fact of a clear bearish breakout of 0.90. As long as the pair remains below 0.90, the probability for approaching the support at 0.8860 is high and on the contrary a possible recover above 0.90, makes the last months developed uptrend stronger. Sell positions is our selection for this week.
USDCAD (US Dollar – Canadian Dollar)
Marginally bullish was the last week for USDCAD which opened at 1.3560 and closed at 1.3595. After the bullish reaction in the early June, there is a consolidation around 1.36 without an obvious trend. It means that except the oil prices that always have a serious role on the specific pair, a critical factor will be the distancing (either up or down direction) for the balance price at 1.36. Next Wednesday is important day for Canada with the Interest Rates announcement (no change from the current price of 0.25% is expected), followed by the usual press conference regarding the economic and the monetary policy. Sell positions is our best option for the current week.
USDCHF (US Dollar – Swiss Franc)
Another bearish week for USDCHF (weekly open price at 0.9447 – weekly close price at 0.9412) which confirms even more the downtrend channel that has started about two months ago. The pair has opened the current week below 0.94 and we’ll open sell positions targeting the price area of 0.93.
AUDUSD (Australian Dollar – US Dollar)
Slightly bullish was the last week for AUDUSD which opened at 0.6929 and closed at 0.6947. During the week, we saw attempts of breaking out the milestone price at 0.70 but the pair does not have the necessary power to do it for the moment. On Thursday, there is the Unemployment Rate in Australia and in combination with the increased number of coronavirus cases throughout the country may cause correction to the pair, to the area of 0.69. Of course, under the weak USD circumstances the resistance of 0.70 may fall but we prefer opening sell positions this week.
SP500
Profitable was the last week for SP500 which closed at 3,178 points, about 2% higher. The current has also opened in a bullish trend so the higher levels of the Index at 3,231 points, after the coronavirus era is now visible. The markets are still in an optimism mood by taking for granted the guarantee for liquidity if need and the investors currently ignore the high numbers of coronavirus cases and the respective economic consequences. It’s difficult to be against this uptrend so we’ll try long positions for one more week but again, the probability for heavy corrections is still there.
DAX30
Bullish was the last week for DAX30 which closed at 12,698 points, having performed profits of 1%. The bulls keep going so the next target for our long positions is the price area of 13,000 points.
FTSE100
We have many concerns regarding FTSE100 because it was the only of the major Indices that closed with losses (weekly close at 6,097 points, 0.7% lower). The fundamental issues of the UK economy along with the stagnation in the Brexit chapter, press the stock markets lower and maybe and this situation could turn into a correction after some light market turbulences. We’ll go short this week.
Gold
Bullish was the last week for gold which managed to stay above $1,800, by closing at $1,801.65 and profits above 0.8%. During the week, we saw prices even above $1,829 but last Thursday and Friday were very bearish days. As long as the gold prices remain at this high level, the buyers are very happy and higher highs may occur. The risk–off mood due to the increased coronavirus cases, favours gold so we’ll open long positions for one more week.
US Oil
It was another profitable week for oil prices, since the spot price closed at $18.23 about 5% higher. The futures market though, remains stuck around $40 during the last weeks. The crude oil inventories are still close to the all-time records and it shows that the demand has not recovered yet. The high numbers of coronavirus cases may intensify the fears and the concerns globally and we may see corrective trends. We’ll try short positions, based on this conclusion.
Bitcoin
A weak rise for Bitcoin took place last week, giving an end to the sequence of four bearish weeks in a row. More specifically, Bitcoin closed at $9,306, having performed profits like 2.5%. The most important cryptocurrency in the world still remains into the channel between $8,700 and $10,000 and still a fundamental reason for a bullish or a bearish breakout has not occurred. There are still many voices, shouting about security issues but still the crypto enthusiasts are very happy with their choice. We expect another low volatility week and the best option for us to apply a range strategy on Bitcoin.
