Japanese Yen Continues To Strengthen
The Japanese yen is stronger for a second day on signs that the recent selling was overdone. The Bank of Japan meets on January 21 and 22 and traders have already priced in potential moves that the BOJ may make. Many traders feel that to weaken the yen further will require much bolder moves than the Bank of Japan is capable of. The yen is currently trading at 88.24 to the US dollar. The yen is stronger by 50 pips on the day. The high on Monday was 89.67, so the yen has strengthened quite a bit.
Japanese Stocks Weaken As The Yen Strengthens
The Nikkei 225 fell as the yen continues to gain strength. As I’ve been telling binary traders there is an inverse correlation between the yen and Japanese stocks. When the yen strengthens, sell binary puts on Japanese stocks. Do the inverse when the yen weakens, buy binary calls on Japanese stocks. The yen is driving Japanese stocks right now. In my opinion the yen is looking oversold and I think we’ll see more short covering by traders.
European Finance Minister Says Euro Is Dangerously High
European Finance Minister Jean-Claude Juncker said the euro is “dangerously high” after it traded above 1.34 to the dollar. This is the highest the euro has traded against the dollar since February of last year. The euro is currently trading at 1.3288 to the dollar, down 16 pips. The euro has rallied on signs that the euro zone debt crisis is abating and that the global economy is improving. A stronger euro makes European exports less attractive and policy makers prefer a weaker currency to help exporters.
Crude Oil Drops Over High Inventories
Crude oil fell on the back of concerns that inventories in the US are very high for this time of year. Demand is still weak in the US and demand needs to pick up to make a dent in supply. The US is producing record amounts of oil as new technologies spurred new discoveries.
Crude oil is trading at $93.59, up 31 cents. For binary traders it appears that the rally is losing momentum. Prices weren’t able to reach $95 and traders have sold and locked in profits. Many markets that have recently rallied appear to be losing their momentum as well. I’m leaning to recommending that binary traders play the short side and stick with binary puts. There’s a lot of resistance above $94 and we could easily go lower. Traders need to watch the uptrend line on the chart and see if the support holds. If this support breaks, look out below!
Gold Gains As World Bank Cuts Global Growth Forecast
Gold rose for a third day after the World Bank lowered its global growth forecast to 2.4 percent from an earlier forecast of 3 percent growth. The bank said that government spending cuts, joblessness and low business confidence is dragging down growth in the developed economies. Traders are also concerned over the impending battle in the US over the debt ceiling. Republican lawmakers are in a battle with President Obama over spending cuts that they want. Gridlock in Washington has many investors worried and they’re flocking to the safety of gold. Gold is trading at $1682.20 and silver at $31.42, down 11 cents.
Platinum is down $18.20 to $1671.70. Bulls are selling and locking in profits after the tremendous run platinum has had. I advise binary traders to do the same. Platinum traded above $1700 yesterday and I see the bull run continuing after this selloff.
As always good luck to all binary traders and be sure to check back for the latest updates!
