This Week’s Forex Trends
October 11
The Q3 earning season has just begun. The general trend this month is reminiscent of the bearish market trend of the year 2008. Here’s a peak at the Forex market trend for this week.
USD
As the investors are slowly waking up to the Q3 earnings season, the USD is edging towards the peak of its most recent ranges. NASDAQ, DJIA and S&P 500 are all within close ranges of their all-time highs, but the softening worldwide economy may lead to slightly weaker profits than expected. The dollar continues to remain aptly supported especially at a time when the U.S. economy seems to be outperforming its counterparts, and the recent announcements by the Federal Reserve on unlimited quantitative easing.
Last Friday saw a surprisingly healthy employment report that might help investors get a pulse on this week’s inflation. The Federal Reserve’s Beige Book is going to be released today and the week is poised to close with the University of Michigan’s Customer Confidence and the producer price index. The general trend suggests that the dollar is likely to enjoy good support within its recent confines. However, there is a slight downside trend possibility owing to the constantly struggling global economy.
For your Binary options trade, a call below any entry above the recent ranges of USD is likely to have a profitable outcome.
EUR
IMF’s warning issued last week on steeper declines in the Eurozone economy has led to a decline in EUR compared to the last week. In response to the IMF’s warning, the President of European Central Bank addressed the EU parliament by saying that there is no alternative other than austerity. The German chancellor on the other maintained the pressure on her Greek counterparts to meet with austerity benchmarks, stressing on her desire to retain Greece in the bloc.
In view of an implicit lockdown at Athens, the EUR is likely to retest its 200-day moving average, which is currently at 1.2867. The coming days are likely to witness feeble economic data based on the currency outlook. A call on an entry below the current rates as your binary option might just work in your favor at the end of the week.
GBP
The Sterling began its week with a retest of its 1.60 handle against USD while getting out of a week long losing streak vs. EUR. September saw a much steeper fall than expected in British manufacturing and industrial production with each registering a -1.2%. However, an increasing amount of investors are moving towards British assets for alternatives compared to the other European nations. The British PM Cameron came close to calling a ballot on U.K.’s membership in the EU yesterday. He told that the current European crisis has provided Britain with an opportunity to seek “fresh settlement” with the common currency bloc and a referendum would be the best way of doing things. A split from EU is likely to induce a positive effect on GBP as opposed to EUR. The general trend suggests that a Call on any higher entry pertaining to GPB might just give you an edge.
JPY
As the recent rhetoric of the Japanese policymakers has died down a notch, the Yen is moving back towards the top of its recent ranges. As a result, USD/YEN has broken well beneath its 50-day as well as 200-day moving averages as the investors are hesitant to take any risks. In addition, last night saw the release of data pertaining to Japan’s current account surplus which suggested a gain for the first time in 3 years as the lower imported energy costs make up for gains in the Yen.
Large-scale debt monetization is likely to occur in Japan resulting the weakening of Yen. The issue finally boils down to one question, when will the monetization begin? The answer is very hard to predict. Several predictions last year suggested that it must have begun by now. The trend suggests that a Call on the Yen to reach higher range and a Put on any decreasing trend would be profitable as your binary options. However, in view of the shaky situations it might just prove profitable to stay as far away from Yen as possible for a while.
Commodity Currencies
Commodity linked currencies began the week on a lower note owing to the falling commodities and stocks that weaken the demand for riskier assets. Despite the moderate gains in the oil price, the CAD observed downfall from its recently achieved highs. In the mean time, September saw a less steep fall of the Canadian housing starts at 220.2K as opposed to the predicted fall of 205.0K. The AUD observed a cut back on the overnight gains and is appearing to resume its decline in oar with the USD. Any decision for Call or Put needs may depend hugely on an Australian employment report that is due to be released later this week as the Australian economy has shown significant signs of slowing down.