RISE WITH OBSTACLES AND DIFFERENT SPEEDS
Best Choice for the next weeks to months
Buy USDCHF in the long run, now at 0.9430
USDCHF has developed an uptrend since the beginning of 2021 and a price area of 0.88. In 4 months, it has performed more than 600 pips, based on the USD strength and CHF weakness. Last week, the Swiss Central Bank (SNB) retained the Interest Rates to -0.75%, continuing the monetary policy of negative rates, and updated the pledge to intervene in the Forex Market to prevent currency gains. Many analysts predict that USDCHF can rise as far as 0.98, as long as the strength of USD carries on.
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Weekly Report: Indices, Commodities, Currencies and Cryptos
The expected Biden’s investment plan was finally unveiled on Wednesday and it is a recovery package through fiscal expansion, by revitalizing transportations (bridges, roads, ports, airports), broadband, care for elderly and disabled Americans, houses & schools, water infrastructures, etc., in 8 years. This plan comes along with a raise of the corporate tax rate, up to 28% which has developed already many reactions to the Republicans part, on its way for approval in Congress. Also, the news from the jobs market in the USA exceeded every expectation: 916K new job positions were created in March. The bond yields, after the certain hopes for US economic recovery, started to rise again and the current price is above 1.72%. This fact helped the stock markets to perform another profitable week while USD had a profitable week too (3rd in a row).
In Europe, ECB president Christine Lagarde claimed that the policymakers will continue to use all the tools to deliver the desired mandate and she challenged the markets to “test us as much as they want”. At the same time, ECB expanded the bond-buying program to ensure and protect the growth in Eurozone.
As per the COVID-19 pandemic, the vaccinations have been accelerated lately in Europe and the USA but the increased number of cases shows that there’s still a long way to cover before the problem is resolved. Certain concerns have been developed for a possible recovery delay.
Gold and oil had rather a consolidative week and Bitcoin had a mild bullish recovery. The current week, after the Catholic Easter, is dominated by the FED session for Interest Rates and the Monetary Policy, by the IMF session, by the PMIs announcements in Eurozone, Germany, and the USA, and by the Unemployment Rate announcement in Eurozone.
Another strongly bullish week passed by for SP500, which closed at 4,027 points and profits more than 1.6%, performing also a new all-time high price. SP500 was not affected by the higher bond yields but on the contrary, the positive expectations regarding the US economy, lead the Index to surpass the 4,000 points for the first time in history. The Biden plan, the higher rate of new job positions in the USA, and the vaccination acceleration create a positive outlook and a continuous uptrend for SP500 which could stop only with a negative outlook or with profit-taking of some investors which could cause corrections. We’ll keep on opening long positions.
It was the 5th bullish week in a row for DAX30, which closed at 15,200 points, performing profits that approached 1.5%. The Index is favored by the global positive outlook of the stock markets and by the markets’ expectations on the European stocks which are considered by many stock analysts as an opportunity. The strong uptrend of DAX30 from early November is obvious, it is temporarily interrupted by profit-taking or possible news that affect the trend but, in any case, we’ll try long positions for one more week.
A bullish week passed by for FTSE100 as it closed at 6,735 points, with profits close to 0.85%. The general positive mood in stock markets boosted the Index to perform profits even in a low volatility week like last week which was the week before Easter. FTSE100 can look higher, to the multi-week highs at 6,805 points or even higher at the yearly highs above 6,905 points. Possible corrections can create serious concerns below 6,565 points and it takes more attention since the UK economy issues (mostly due to the Brexit) still stand. We prefer long positions for one more week.
Gold had a consolidative week as it closed at $1,731 with marginal losses. The beginning of the week was strongly bearish, as gold dropped even at $1,678 but on Thursday and Friday the trend turned bullish, as a result of Biden’s plan announcement and the USD correction that balanced the week. Gold is fighting the high bond yields which is an alternative safe–haven asset solution and we consider very critical next events the FED session on Wednesday, regarding the Interest Rates and the US Monetary Policy as well as the Jerome Powell speech on Thursday. The downtrend of the gold has not been affected so far and a possible trend continuation may test the strong support at $1,672, so short positions is our selection for the current week. It takes a bullish breakout above $1,755 to develop hopes for a recovery.
Mildly bullish was the last week for oil, as the next month’s futures closed at $61.24, performing profits like 0.85%. The decisions of OPEC during the last week are very important since the member countries agreed to gradually increase the oil production by 2M barrels per day, from May to July. This decision balanced the oil prices that had many other consolidative reasons as well: strong USD, the restarting of traffic in the Suez Channel, fears for demand recovery after COVID-19, and mixed news regarding the US inventories. During the last two weeks, oil is oscillating around $61, obviously searching for a bullish or bearish catalyst. If the decisions of OPEC have a serious affection, we may see oil prices below $60, and even close to the price area of $57. It takes a bullish breakout above $62.50, to have good chances for an uptrend continuation that has been developed during the last 5 months but we believe that it’s time for short positions this week.
EURUSD (Euro vs US Dollar)
It was the 3rd in a row bearish week for EURUSD, which opened at 1.1791 and closed at 1.1757. The pair, despite its attempt to recover at the end of last week, could not have a bullish week because USD was strong again, after the higher bond yields. The announcement of Biden’s investment plan and the big recovery in the US jobs market develop high expectations for the US economy. The higher corporate tax rate is not favored by the markets but many companies will take advantage of the plan as many infrastructure projects will be implemented. The downtrend of the pair since the beginning of 2021 creates expectations for testing the price area of 1.16, which is strong support and a multi-month low. Sell positions is our selection for this week.
GBPUSD (Great Britain Pound – US Dollar)
GBPUSD had a bullish reaction last week, by opening at 1.3782 and closing at 1.3825. USD was strong for one more week but GBP was even stronger as the vaccinations in the UK continue satisfyingly. The pair has consolidative trends around 1.38 since both USD and GBP have been strong lately. In case of a possible USD strength continuation, the pair will drop more and we may see a downtrend below 1.3670. For many buyers though, the main target is the price area of 1.40. The last time that GBPUSD was there, was on March, 18. Buy positions is our weekly selection.
USDJPY (US Dollar – Japanese Yen)
USDJPY continued its strong uptrend for one more week, by opening at 109.71 and closing at 110.68. The pair has basic footings on the higher bond yields and the rising stock markets and it managed to break out the milestone price of 110. Of course, the buyers have now more reasons for more profits and their next target is the resistance at 112.25, since the last time we saw such a price level was at the end of 2018. We retain our buy positions for one more week.
EURJPY (Euro – Japanese Yen)
Bullish was the last week for EURJPY as it opened at 129.37 and closed at 130.11, marginally above the milestone price of 130. As long as the price is above 130, there are good chances for a bullish breakout of the 2.5 years high price above 130.70 but in case of losing 130, the sellers’ target is the price area of 128.30. Sell positions are what we’ll open this week.
EURGBP (Euro – Great Britain Pound)
EURGBP had another strongly bearish week, with a weekly open price at 0.8551 and a weekly close price at 0.8503. All days (except the consolidative Thursday) were bearish. The downtrend seems to stop at the strong support of 0.85 so we need to see if there will be a bullish reaction or if the 0.85 will break out with the next target for the sellers, the support of 0.8275. Sell positions is our selection for the current week too.
USDCAD (US Dollar – Canadian Dollar)
It was a mildly bullish week for USDCAD, as it opened at 1.2570 and closed at 1.2574 after a strong USD which balanced the relative strength of CAD, due to the rise of oil price. If the pair can exceed 1.2650, there are certain chances to continue with a strong uptrend and this scenario becomes stronger after the latest decision of OPEC for oil production rise that may cause the oil prices to drop. This scenario also contains the condition that USD will keep on being strong and by trusting it, we’ll open buy positions this week.
USDCHF (US Dollar – Swiss Franc)
Another bullish week passed by for USDCHF which opened at 0.9384 and closed at 0.9414. The pair is in a heavy uptrend after the USD strength and after the SNB session in Switzerland. The Interest Rates were unchanged at -0.75% but SNB updated the pledge to intervene in the Forex Market to prevent currency gains. This news could potentially boost USDCHF much higher, even to 0.98, so buy positions is our selection this week too.
AUDUSD (Australian Dollar – US Dollar)
Last week was bearish for AUDUSD, as it opened at 0.7631 and closed at 0.7606. The strong USD presses the pair and it possibly may drive it even to 0.75. The RBA session this week for Interest Rates and Australian Monetary Policy on Tuesday as well as the FED session on Wednesday for the same reasons in the USA are very critical for the AUDUSD. There is a developed downtrend since the end of February that requires prices above 0.77 for a possible reversal but until then, we’ll try sell positions for one more week.
Bitcoin had a bullish reaction, after two corrective weeks, closing the week at $58,212, with profits that touched 4.5%. There was some good news: Visa and Paypal will expand the commitment of Bitcoin in their transactions and Morgan Stanley (big US Investment Bank) announced new investing portfolios where Bitcoin may participate with a 25% percentage. Bitcoin is capable of returning to its heavy uptrend with a first and obvious target, the price of $60,000. It could also reach and surpass the all-time high price at $61,782 and to look even higher so long positions is what we’ll open this week.