European stocks rose on Friday finishing the week higher for sixth time in a row. This is the longest streak in more than two years and it is spurred by speculations for more stimulus measures from the central banks in order to support the economy. In the past couple of weeks the biggest economies are showing hesitant results, which make investors to believe that further support will flow to the markets. The German DAX index closed the last session for the previous week 2.15% higher at 6557.10, while the French CAC 40 gained 1.46% to 3180.81. In U.K. FTSE 100 advanced with 1.03% to 5666.13.
However, the positive sentiment looks very fragile especially in the season of earnings. Binary option investors should expect downside movement if corporations don’t manage to fulfill the expectations.
In U.S. the situation is almost the same. Friday’s session was strong enough to drive the stocks above the par for the week. Dow Jones Industrial Average gained 1.62% to 12777.09, while NASDAQ Composite added 1.48% to 2908.47. The market indicator – S&P 500, closed the session 1.65% higher at 1356.78. The positive trading on Wall Street was supported by the financial sector where J.P. Morgan announced that it will probably post record earnings for 2012 even after reporting $4.4 billion loss.
Today the most important events from the economic calendar are Eurozone CPI and U.S. retail sales. Inflation in the Euro area is expected to remain unchanged at 2.4% on annual basis, while retail sales in U.S. are expected to rise with 0.2% in June compare to the 0.2% contraction in the previous month.
The negative picture around binary EUR/USD continues to develop. Investors should expect new test of the psychological 1.22 with first support around 1.2165. Break below the latter will loosen the price lower towards the key 1.20. On the upside binary players should expect first intraday resistance at 1.23, followed by 1.2335 and 1.24.
The U.S. market indicator is in positive trend since June and it needs to break above 1375 in order to extend the picture. Binary investors should expect intraday resistance around 1363, followed by the crucial top at 1375. On the opposite direction, downside movement is expected to meet support in the 1330-1335 zone. Break below the latter will provide good opportunities for “put” options towards the next support at 1310.
Binary DAX options remains in short range trading between 38.2% and 50.0% Fibonacci retracements of the 7216-5918 movement. The current price is on the upper boarder, which suggests downside correction. Binary investors should expect intraday support at 6500, followed by the key 6400. On the positive side call traders should expect first resistance at 6575, followed by 6600 and 6650.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.