26/10/2020

 

General Comment

There was an increased number of new COVID-19 cases in many European countries but this fact did not affect very much the markets that are dominated mostly by the upcoming US presidential elections as well as the new fiscal stimulus package in USA and possibly some expectations for a package in Europe too. EUR was strong but USD had serious losses while the stock markets in USA and Europe had losses as well. As per the commodities markets, gold had stable prices and oil moved bearishly.

This week, some positive news regarding the COVID-19 vaccines may affect the markets but most likely this will happen through the developments regarding the stimulus package in USA (and maybe in Europe) and the US elections which are now very close. Many economic announcements this week too, such as the Interest Rates in Eurozone and the Q3 2020 GDP in Europe, Germany and USA. For the investors that select different markets, there will be a special weight in the Interest Rates announcements in Japan and Canada.

 

EURUSD (Euro vs US Dollar)

Very bullish was the last week for EURUSD, opening at 1.1720 and closing at 1.1858 since the investors decided to sell USD ahead of the US elections. The agreement for the new US stimulus package is still expected but there are some expectations for such a package in Europe as well so the press conference after the Interest Rates decision on Thursday has a special importance. The pair has developed uptrend dynamics but we have to see prices above 1.1920 in order to have a strong probability for approaching the price area of 1.20. On the contrary, USD may become strong at any time through the US elections expectations and this may cause a drop for EURUSD but in such a case, it takes a bearish breakout of 1.1680 in order to speak safely for a downtrend. We may try buy positions if we see a certain upwards movement.

 

GBPUSD (Great Britain Pound – US Dollar)

Bullish was the last week for GBPUSD which opened at 1.2894 and closed at 1.3044. During the week, we saw prices even close to 1.32 but by the end there was a mild correction. There is a positive view regarding a Brexit agreement but UK has serious issues from COVID-19 as new restrictions are on the run as well as many protests from people who react to it. Of course, USD was very weak but possible new and encouraging updates from Brexit may push the pair higher and may cause a bullish breakout of 1.32. In case of prices below 1.30 again, investors will be disappointed but trusting the bullish scenario, we’re keen to open buy positions this week.

 

USDJPY (US DollarJapanese Yen)

Bearish week for USDJPY which opened at 105.37 and closed at 104.71. The US 10 years treasury yield climbed a bit more at 0.81% but it did not help the pair which had bearish movements, especially on Wednesday. Despite the drop, USDJPY did not exit from the tight channel that it is moving in the last months because it takes a bearish breakout of 104 for this to happen. This support is very strong and it limits the probability of a further drop but of course with an upcoming stimulus package and US elections nothing is impossible. We remain sellers.

 

 

EURJPY (EuroJapanese Yen)

Bullish was the last week for EURJPY with open price at 123.46 and close price at 124.18 but it did not manage to breakout the resistance of 125.10 even if it attempted. It seems a new price balance between 123 – 125 and it takes more important news in order to escapes from this zone. Expectation of a new WE in Europe may weaken EUR so we may open sell positions this week.

 

EURGBP (Euro – Great Britain Pound)

It was the 3rd in a row consolidative week for EURGBP which opened at 0.9078 and closed at 0.9089. There is a balance between EUR and GBP since both are strong currencies lately. Of course, any positive news from Brexit may boost GBP but the milestone price of 0.90 which still stand from the beginning of September will be difficult to fall. Keeping that in mind, we’ll open sell positions.

 

USDCAD (US Dollar – Canadian Dollar)

USDCAD took its bearish direction again by opening at 1.3184 and closing at 1.3124. USD was weak and it could manage the oil price losses that may times weaken the CAD. On the other side though, the pair has a remarkable resilience at 1.31 so either we’ll see a bullish reaction up to 1.3260 either (in case of a bearish breakout of 1.31) there will an approach of the price area of 1.30. Oil prices and US elections will dominate the pair and we may open sell positions this week.

 

USDCHF (US DollarSwiss Franc)

After a temporary bullish reaction, USDCHF returned to its downtrend by opening at 0.9143 and closing at 0.9041 so the milestone price of 0.90 is now extremely close. The trend is definitely bearish but the price of 0.90 is a multi-year support (from the beginning of 2015) and some buyers may occur at these levels and they are able to rise the pair. We’ll try sell positions but if we see significant reactions around 0.90, we may close & open buy positions.

 

AUDUSD (Australian Dollar – US Dollar)

Bullish was the last week for AUDUSD which opened at 0.7078 and closed at 0.7136. The Bank of Australia (RBA) leaved open window for new rate cut but the weakness of USD kept the pair above 0.71. There is a consolidation for AUDUSD between 0.70 and 0.7250 during the last weeks and if USD keeps on being weak, we may see an approach of 0.7250. In the opposite case of a strong USD (most likely through US elections), we may see the pair approaching 0.70. Until this happens, we will open buy positions.

 

SP500

It was a bearish week for SP500 which closed at 3,453 points and mild losses like 0.30%. Without important news on the upcoming stimulus package, the Index seems to wait but, in any case, it had lower losses compared to the other Indices in USA and Europe. There a slight bearish outlook since the mid October which we expect to carry on but news from stimulus package and US elections may revert the picture instantly and significantly, at any time. Technically speaking, the drop will be more intense below 3,400 points and there will be high hopes for an uptrend above 3,500 points. Sell positions is our selection for this week but we are ready & flexible for any of the above cases, to revert our positions.

 

DAX30

Another bearish week for DAX30 took place with a weekly close price at 12,650 points, almost 2% lower. The futures of The Index, early this week lose another -1.35%, giving a further bearish boost to the support of 12,315 points. The expectations for a new QE in Eurozone from ECB may change things rapidly by giving important profits to DAX30, so long positions is a good case for us this week.

 

FTSE100

It was a bearish week for FTSE100 which closed at 5.841 points, performing losses close to 1%. The Index is not able to approach the price area of 6,000 points but on the other hand it does not have a strong downtrend neither. The Brexit agreement issue and the COVID-19 consequences to the UK economy, dominate the UK stock markets. A possible approach of 5,700 points is a maybe a signal for more bears so we may try short positions this week.

 

Gold

A neutral week passed by for gold prices, with open and close around $1,903 and low volatility. The gold investors expect the news regarding the new stimulus package in USA, they also monitor the US elections and they evaluate the economic results such as the GDP announcements by the end of this week. USD was weak but it maybe become strong and this fact may press the gold prices but a possible agreement on the fiscal may inflate it and it may turn the investors to non-inflated assets such as gold. The price of $1,876 is the first strong support while the first resistance is close to $1,937. We will wait until we see bullish reactions and we may try long positions this week.

 

US Oil

Lossy was the last week for oil prices. The futures close price was at $39.67 and the losses were like 2.60%. Oil lost the critical level of $40 and it is moving already to $39, early this week. The biggest problem remains the low demand since the transports and the transfers are still in low levels due to COVID-19. OPEC may try to support oil prices through new production cuts but the latest attitude of oil may cause price drops even below $37, soon enough. Keeping in mind this fact, we will open short positions this week. Some possible new buyers may occur above $40.

 

Bitcoin

Explosively bullish was the last week for Bitcoin which closed at $13,039 and profits more than 13%. PayPal announced that will accept Bitcoins from now on and it was undoubtedly a very positive announcement for the world of cryptos. This rise though is based to other factors as well such as the high inflation in many countries due to many past and upcoming Quantitative Easing packages. The price of Bitcoin returned to the levels of the summer of 2019 and since the next big target for Bitcoin owners is around $14,000, the investors should be very careful because big & short-term profits lead to liquidations through take profits and it may cause price corrections. We remain into long positions in any case.

 

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