Forex And Binary Options Weekly Roundup
US and European investors in the forex and binary options market went on a fire sale to end the week. Investors dumped crude oil, British Pound Sterling, the Japanese yen and bought the US dollar. Equities managed to make a small gain on Friday to end what was a very volatile week. Manufacturing data out of Europe and China came in weaker than expected and that has the market spooked. Worries about demand in China is very bearish for commodities, particularly crude oil. The one bright spot appears to be the US as data on consumer confidence and manufacturing came in better than expected.
King Dollar Reigns Supreme In Forex And Binary Options
The almighty US dollar is roaring with a vengeance. It is the strongest currency right now in the world as the US continues to show economic recovery and strength. As you can see from the chart below, the US dollar is indeed breaking out.
While The US Dollar Breaks Out, British Pound Breaks Critical Support
The British Pound dropped below the critical $1.50 level yesterday, the first breach of this level since 2010. The UK manufacturing report on yesterday’s economic data calendar came in much weaker than expected. The data out of the UK has just been horrible and new Bank of England Governor Carney will likely have to do much more monetary stimulus to get the UK economy moving. Most analysts see the pound going to $1.40 this year. There is just no reason to be bullish the British pound. Fundamentals continue to deteriorate.
Euro Falls Below, But Closes Above $1.30
Manufacturing in the euro zone was weak as well and that pressured the euro. The euro closed lower for a fourth week in a row against the US dollar. The euro zone is in a recession and can’t seem to gain any traction. There are calls now for the ECB to cut interest rates to help the region get out of recession. An interest rate cut will put further pressure on the euro.
WTI Holds $90, For Now
Crude oil continues its bear trend. The market tanked yesterday as the weak economic data underscores the demand case for oil. The last thing energy markets want to see is weak economic data. That means less demand for crude oil and leads to lower prices if demand slows. Yesterday’s low on WTI was $90.04, just above the critical $90 level. A break below there and the next support level is $88 for binary options traders. If the US dollar continues to strengthen, look for $88 to be tested very soon. WTI closed at $90.68 and Brent at $110.40.
Data On Tap For Next Week
Next week brings us the critical US employment report for February. The US has been the one bright spot in the global recovery and continued employment gains in the US labor market will be a positive for global markets. Traders thou are concerned that the weakness in Europe will spill over into the US market.
In Australia we have the RBA announcement on Monday and GDP on Tuesday. Traders are expecting no action from the RBA at this meeting. What they say in their statement will be closely monitored.
On Thursday we have the Bank of England and the European Central Bank Meetings. Markets are not expecting any action at these meetings. What ECB President Mario Draghi says at his press conference will have the forex and binary options market on edge.
As always good luck to all forex and binary options traders. Be sure to check back for the latest updates and hope everyone has a wonderful weekend!
