MAIN FOCUS ON BIDEN’S ANNOUNCEMENTS AND NFPs
Weekly Report: Indices, Commodities, Currencies and Cryptos
Bond yields closed the previous week with a marginal decline. The US 10 years bond yield closed at 1.66%, after the crazy rally of the last weeks. On the other hand, Jerome Powell claimed that the high Inflation is something temporary so it won’t be an issue and underlined that still, the big thing for the US economy is the Unemployment Rate. He also said that although many assets are high-valued, the risk is low and the US banks are well-capitalized. The scheduled economic announcements in the USA were rather mixed but surprisingly the announcement from Europe was significantly positive.
COVID-19 pandemic is still a big problem as the USA and Europe still have high rates of new cases and deaths but vaccinations continue, leaving the optimum scenario for the lockdowns ends soon enough, widely open.
Most of the major stock markets were profitable, profitable was the US dollar too but Euro carried on its decline. Corrective movements we saw for both gold and oil but it was a corrective week for Bitcoin as well.
The current week is dominated by two major events. On Wednesday, the US president is going to announce his new plan for the US economy and some media believe that this new fiscal expansion will be like $3 trillion for new roads, bridges, environmental infrastructures, etc. The big issue though is if this fiscal expansion comes along with the increase of the taxes which could trigger chain reactions to the US economy. It could also affect USD and bond yields and it will strengthen some sectors of the economy while some others may weaken. The second important event of the current week is the NFPs release in the USA which will show the situation of the economy on such a critical measure as the Unemployment Rate.
By the end of the week, we may see low volatility in the European markets due to the Easter holidays of many countries.
Bullish was the last week for SP500, which closed at 3,962 points and profits that approached 1.7%. The stabilization – correction of the bond yields was very critical on this. The tech companies did not have high performance but financial stocks were profitable enough as FED announced that during the next summer, the restrictions on dividends and buybacks will be lifted. SP500 approached its all-time high price and even if performs a mild correction early this week, it may recover and break it. Important and critical factors on this are Biden’s announcements on Wednesday regarding the US fiscal expansion and the NFPs announcement on Friday. We’ll try long positions this week too.
Another bullish week passed by for DAX30, with a weekly close price at 14,854 points and profits close to 1.5%. The Index performed a new all-time high price, confirming that some European stocks give the anticipation to the markets of a good opportunity. The current week has opened with a correction (we cannot exclude more corrections due to profit-taking) but since the trend is definitely bullish, we prefer being long for one more week.
It was a mildly bullish week for FTSE100 as it closed at 6,718 points, performing profits of more than 0.8%. The Index followed the uptrend of the rest major Indices but seems to perform less due to the UK economy issues (Brexit and vaccinations delays). It takes solid prices above 6,800 so we can have an uptrend while below 6,430 points, we should consider some concerns for a bigger correction δείκτη. We’ll try long positions in the current week.
It was a corrective week for gold after two bullish weeks in a row. More specifically, the weekly close price was at $1,731 and the losses touched 0.75%. The strength of the USD had a critical role in this correction but it also seems the gold is not able to find a certain direction during the last few days. Biden’s announcements on the US economy on Wednesday may change things since they may affect a series of factors of the US economy such as the bond yields and the USD price. It takes a bullish breakout above $1,755 so gold can escape from its sideways channel and the same thing may happen in the south, below $1,715. Short positions are our selection for the current week.
Bearish week (the 3rd in a row) for oil, as the next month’s futures closed at $60.71, with losses like 1.25%. There were strongly bullish and bearish days during the week but the overall performance was negative since the vessel Ever Given closed Suez and even if the canal opened early this week, it will take a few more days to return to normality. An important factor to the oil prices is also the COVID-19 pandemic because it creates concerns for the quick recovery of the demand. We also learned about a 25-year agreement between Iran and China which may increase the supply in the long-run and finally, another important news was the attack on oil and military sites from 18 armed drones in Saudi Arabia. This week has opened below $60 and maybe the downtrend will carry on so we’ll try short positions this week. In case of solid prices above $60, we’ll close them and we’ll open buy positions.
EURUSD (Euro vs US Dollar)
Bearish was the last week for EURUSD, with a weekly open price at 1.1875 and a weekly close price at 1.1794. USD continued the uptrend which has started from the beginning of the year and seems steady and solid. Europe, on the other hand, is sinking into pandemic issues and lockdowns and even there are high expectations, the delays produce a negative outlook for a possible loss on certain economic sectors like aviation and tourism. This week’s announcements are very critical and possible game-changers: the fiscal expansion announcement on Wednesday may change the outlook of USD at least in the short-term. The pair (if conditions stay unchanged) could continue the downtrend and the next target for the sellers is the strong support at 1.16 so sell positions is our selection.
GBPUSD (Great Britain Pound – US Dollar)
Another bearish week for GBPUSD, which opened at 1.3837 and closed at 1.3791 while during the week the low price was at 1.3670. The strong USD carries the pair to a downtrend from the end of last February even if the UK announcements last week were not that bad: Retail Sales were 2.1% up in February, on an MoM level. All eyes fall on Biden’s announcements this Wednesday and the NFPs on Friday and we’re curious to see if the uptrend of the USD can bring the pair below the support of 1.3670 or if we’ll see a reversal that could bring GBPUSD to the price area of 1.40 again. Sell positions is our selection for the current week.
USDJPY (US Dollar – Japanese Yen)
Strongly bullish was the last week for USDJPY since it touched the milestone price of 110. More specifically, the weekly open price was at 108.61 and the weekly close price at 109.68, even if the bond yields had a corrective week. USD is strong lately and it could carry the pair above 110 easily but we need to pay special attention because the next Wednesday’s & Friday’s announcements may change the whole image. We’ll try low-sized buy positions, targeting the price area of 110, covering our profits, and waiting for the news.
EURJPY (Euro – Japanese Yen)
EURJPY opened at 129 and closed at 129.35 but the week was bearish since the pair had opened with a big gap from 129.62. EUR seems weak lately, JPY is kind of stronger due to the tighter monetary policy in Japan so we may see attempts of breaking out the support at 128.30. Sell positions is our selection for the current week.
EURGBP (Euro – Great Britain Pound)
Bearish was the last week for EURGBP, after a short recovery, opening at 0.8580 and closing at 0.8549. The pair is in a heavy downtrend since December and from the price area of 0.9230 and obviously, the next target for the sellers is the milestone price at 0.85. It takes a strong recovery above 0.8650 to start existing hopes for a trend reversal but unless this happens, we’ll open sell positions, targeting 0.85.
USDCAD (US Dollar – Canadian Dollar)
USDCAD carried on bullishly for a second week, as it opened at 1.2514 and closed at 1.2575. The strong USD, combined with the lower oil prices, reverses the downtrend of the pair that had started about a year ago. If things don’t change after the announcements on Wednesday (fiscal expansion) and/or Friday (Unemployment Rate in the USA) then maybe the pair can climb, up to 1.27 so we’ll try to buy positions this week.
USDCHF (US Dollar – Swiss Franc)
Very bullish was the last week for USDCHF which opened at 0.9292 and closed at 0.9390 since USD kept on rising. In case of things do not change in the USA through the important news during the week, the pair may reach the price area of 0.95 very soon so we’ll open buy positions this week.
AUDUSD (Australian Dollar – US Dollar)
A bearish week passed by for AUDUSD since it opened at 0.7708 and closed at 0.7639 due to a very strong USD. The drop could be even bigger without the bullish reaction on Friday along with the profitable US stock markets in the USA. The strong USD could cause a further decline on the pair, to the price area of 0.75 so we prefer to sell positions this week. Of course, we cannot exclude any surprises, mainly from the expected news and announcements in the USA.
It was the second in a row corrective week for Bitcoin, which closed at $55,791 with losses that approached 2.8%. Jerome Powell (FED) stated that he considers cryptocurrencies as a speculative instrument rather than a payment instrument so cryptos can be considered a substitute for gold and not for US dollar. Also, Ray Dalio (important and successful fund manager) said that Bitcoin could be illegal in the USA if it becomes very popular and successful parallelizing our time with the 30s in the USA where gold possession was illegal. Bitcoin seems to slow down and to correct after its crazy rally and it must exceed the price area of $57,000 to give back the smiles to the crypto investors. On the contrary, solid prices below $55,000 increase the chances for prices close to $50,000. We trust the recovery of the Bitcoin so we’ll try long positions for one more week.