Weekly Binary Market Review – 5 November 2012

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Weekly Binary Market Review: 5 Nov 2020

Monday 5 November, 2020

Last week witnessed many different traders scrambling towards the USD ahead of the U.S. Presidential elections and volatile markets. The USD is viewed as a safe-haven for investments as Gold and Crude Oil fell on Friday to $1,677.95 and $84.83 respectively. The dollar was doing well even with all the chaos emanating from the devastating hurricane Sandy. The EUR/USD pair rose by 0.82% and the AUD/USD fell by 0.6% on Friday as traders are heavily focussing only on USD.

The markets seem to be likely to continue their lacklustre trend over the weeks to come. Risky assets are nowhere near poised to make any sort of comeback. Here’s a look at some of the events to come this week.

The week starts off with the G20 meeting. The Spanish unemployment report is all set to be released today. Traders are worried as the stock markets tumbled earlier on Friday as rumours about the Spanish unemployment rate reaching around 25% are making the rounds. If the final reports beat the rumoured estimates, the markets are bound to tumble further. Make sure you keep an eye out for the report while trading your options.

U.S. Treasury Secretary Timothy Geithner, right, and Japanese Finance Minister Koriki Jojima

The German Industrial Production index will be out on Wednesday. Industrial production in August fell considerably, signalling the cooling down of Europe’s largest economy. Investors are not increasingly optimistic this time. Traders might be slightly happy if the report shows an increased production.

The economic calendar for U.K. is a busy one this week with the BOE rate decisions and the Manufacturing Production index release. The Manufacturing Production m/m is set to be released on Tuesday. The report being a key indicator of economic well-being can swing the markets considerably. Keep a wary eye on the report when trading your binary options this Tuesday.

The Asset Purchase Facility that will decide the BOE rates is expected on Thursday. This can influence the asset purchasing power in the market.

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Unlike the U.K., the calendar for U.S. is a tad bit idle. The Crude Oil inventories report is expected to be released on Wednesday. This report will furnish the difference in oil barrel inventories for the past week. The bearish crude oil market might show some improvement after the U.S. Presidential election on Tuesday.

The weekly unemployment claims report is expected on Thursday. The report is probably the most significant event of the week as it can have a significant impact on the trading safe haven USD. The Preliminary University of Michigan’s Consumer Sentiment Index is set to release on Friday this week and can also move the otherwise lacklustre markets slightly.

The Japanese calendar is also not a very busy one. The U.S. fiscal cliff and the European debt are going to be the major topics of discussion. The Core Machinery Orders and the Current Account Data are due on Thursday.

The Canadian calendar for the week features the Trade Balance Data on Thursday. The Canadian market opens with the G20 Meetings and the Canadian Daylight Saving Time Shift. The Trade Balance Data on Thursday is of great significance as export and currency demand are linked directly and can have a significant impact on production.

The Australian economic calendar is quite hectic this week. The Australian Cash Rate is set to release on Tuesday. This can push the AUD to new lows as traders are expecting the rates to be reduced by as much as 3%.

The week is set to conclude with the release of the EBA Monetary Policy Statement. The statement is a key document that gives insights into the inflation and economic conditions in Australia. As the Australian monetary policy will depend on the outcome of this event, it can also swing the markets considerably.

The G20 Meetings open the week and continue on till the Labour Cost Index due on Tuesday. Other events for the week include the Financial Stability Report from RBNZ on Wednesday and the Employment Change report on Thursday.

The Unemployment Report is also scheduled to be released on Wednesday. The Unemployment Report is a significant event for NZD as it serves as an indicator of economic well-being.

Anything to add that we’ve missed? Leave a comment below.

Weekly Binary Options market review November 5 – 9

The past trading week was also divided into two parts, the same way as we’ve seen it several times before in the latest months in the binary options market. The first half of the week was mainly driven by growing risk appetite with global equities leading the gains after the U.S. midterm elections result was published on Tuesday. Despite the fact that Democrats won the majority in the House, Markets took that news as mostly positive for the economy as Republicans managed to keep the majority in the Senate. Traders were buying CALL options of the stock indices and most of the benchmarks grew on Tuesday. In opposite, major currencies were traded on PUT mode versus the U.S. dollar in that environment. Wednesday changed everything completely with the headline event of the Federal Reserve meeting. Although the Federal Open Market Committee left the interest rates unchanged, the statement of the regulator was more hawkish than it was previously discussed. The rate hike in December is almost a done deal while two more hikes are telegraphed for the first half of the next year. That news made traders change the price action completely.

Monday Asian quiet trading session did not promise anything like that. Economic data kicked off with Bank of Japan publishing monetary policy meeting minutes and BoJ Governor speaking about the interest rates and economic outlook. Both events confirmed the absence of any changes for the third largest economy in the world, and USD/JPY was trading in a slightly bullish bias with CALL options dominating for the currency pair. The Chinese Caixin Services PMI slowed down in October reporting the index at 50.8 level versus 52.9 expected and 53.1 previously. Spanish Unemployment Change did not have a major impact on the Euro. The British Services Purchase Manager Index came in worsening in October (52.2 versus 53.3 expected and 53.9 previously). However, binary options market traders were pushing the CALL button actively for all of the sterling pairs due to the positive headlines in the Brexit topic. Theresa May’s government officials announced a progress in Brexit negotiations with EU and the pound was bolstered by those rumours. BoC Governor Poloz had his monetary policy speech in early New York trading session but he failed to support the falling Loonie. The U.S. economy reported services and non-manufacturing Purchase Managers indices with both figures in green. The greenback traded on a mixed sentiment though.

Asian trading session started with Japanese data on Tuesday. Household spending surprisingly declined in September both month-on-month and year-on-year. The final reading of -4.5% and -1.6% respectively failed to meet the market expectations of the growth and that news together with the Retail Sales Monitor in red zone forced traders to buy PUT options for Japanese Yen. Aussie traders were watching Reserve Bank of Australia in rate decision meeting. The regulator came out with the ‘unchaged’ verdict, stating a certain improvement in the economic outlook. Buyers of CALL options for Aussie pairs won the fight in a volatile trading session and AUD/USD soared towards 0.7300 psychological barriers, the first time in 10 weeks. European economic data was mixed with the more optimistic shift. Purchase Managers indices were published for France, Spain, Italy, Germany and Eurozone with most numbers in green. Moreover, Producer Price Index picked up the momentum in September, increasing inflationary pressure after strong CPI report last week. So, the monthly change was published at 0,5% level (0.4% forecasted) with the positive revision of the previous period (0.4%). The yearly spike in inflation was even more significant with a 4.5% change versus 4.2% expected by the economists. All those strong reports lifted the single European currency towards 1.1500 versus the greenback technical resistance as speculators were buying CALL options for EUR/USD. Building Permits rose in Canada for 0.4% in September. JOLT jobs openings failed to meet the consensus, however, the main topic was the midterms in the United States. Stock indices soared more than 2% on the optimistic political outlook for corporate profits and the tax cut.

New Zealand Central Bank was focusing on the last economic reports in the country before the rate decision. Employment Change was published stronger-than-expected (1.1% versus 0.5% expected), Labour Cost was flat, Participation Rate rose to 71.3% and Unemployment Rate fell sharply to 3.9% from 4.4% in the second quarter. Those improvements were supportive for Kiwi bulls and they were massively buying CALL options for NZD/USD on Wednesday Asian trading session. Japanese data was mixed, however, USD/JPY kept climbing Northwards on risk appetite spike. The volatility went down in the European trading session as traders were awaiting the main event of the entire week for the financial markets – the Federal Reserve meeting. The only data to watch was the Halifax House Price index in the UK and the Retail sales report for the European Union. Stagnation has been noticed which is completely negative for Euro bulls. Ivey PMI rose in October in Canada and the Loonie had a bullish whipsaw initially. However, the demand for USD CALL options overwhelmed closer to the end of the North American trading session.

Weekly Binary Options Trading Briefings 5-12/11/2020 – Employment Data at Center Stage as Modest Improvements in US Overshadowed by Weakness in Eurozone

Binary Options Trading Recommendations for the upcoming week – Market Information and Trading Tips

Market attention has been centered in employment figures in recent weeks and this Friday’s Non Farm Payrolls were an extension of this, showing a net addition of 171,000 workers for the month of October (a modest improvement from the 148,000 jobs increase that was seen in the month of September). But while this improvement is a positive, it should be remembered that 150,000 jobs are needed each month just to keep up with population increases, so any long term rallies based on this data should be viewed with skepticism. Analyst estimates were calling for a rise of 125,000, but this encouraging surprise was balanced with the increase in the Unemployment Rate, which came in at 7.9%.

Unemployment in the Eurozone Posts New All-Time Highs

The last of the major central macro stories for the month could be seen in the latest Unemployment Rate report out of the Eurozone, which showed that jobless rates reached a new all-time high at 11.6% (well above the region’s historical average of 9.2%). These disappointing figures have grown increasingly worse all year, and are now 1.3% higher than what was reported during the same monthly period for 2020.

These negative numbers are being propelled largely by the economic laggards of the 17-member union, Greece and Spain, which are showing the weakest jobless rates in the region and are posting the worst results since this data started being recorded at the inception of the Eurozone itself. The Unemployment Rate in both countries has, for the first time, surpassed the 25% mark, and this provides a stark contrast with what is seen in the member nations with the lowest jobless rates (Austria at 4.4%, and the Netherlands and Germany, both at 5.4%).

But while this might appear to be supportive evidence for the disintegration of the Euro-area as a whole, it should be noted that the overall trends here are clear, with 20 of the European Union’s member countries seeing an increase in unemployment, relative to the same period last year.

My Trading Recommendations in 50 Words

1. The latest move higher in the DAX is creating some bearish opportunities and I will be looking to enter into weekly PUTS at the open on Monday. Weakness in the labor market is likely to filter into other aspects of the economy and we are likely to start seeing failures at current levels.

2. Momentum selling in Gold could also present some opportunities next week but we will need to see prices fall into the 1630 area before weekly CALLS are established. There is a confluence of historical and Fibonacci support in this area and risk aversion could lead to some safe haven buying and propel the metal higher.

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