The week ahead for binary options market
Monday: AUD: Home Loans m/m, RBA Deputy Governor Lowe Speaks; CHF: PPI m/m, SNB Chairman Jordan Speaks; EUR: Industrial Production m/m, Italian 10-year Bond Auction.
Tuesday: AUD: Monetary Policy Meeting Minutes, New Motor Vehicle Sales m/m, EUR: French Preliminary GDP q/q, German Preliminary GDP q/q, French Preliminary Non-Farm Payrolls q/q, ECOFIN Meetings, German ZEW Economic Sentiment, Flash GDP q/q, ZEW Economic Sentiment; GBP: Trade Balance; USD: Core CPI m/m, Core Retail Sales m/m, Retail Sales m/m, CPI m/m, Empire State Manufacturing Index, TIC Long-Term Purchases, Business Inventories; JPY: Core Machinery Orders m/m, Tertiary Industry Activity m/m
Wednesday: AUD: Westpac Consumer Sentiment, Wage Price Index q/q; GBP: Claimant Count Change, Unemployment Rate, BOE Governor King Speaks, BOE Inflation Report; CHF: ZEW Economic Expectations, EUR: CPI y/y, Core CPI y/y, ECB President Draghi Speaks; CAD: Manufacturing Sales; USD: Building Permits, Housing Starts, Capacity Utilization Rate, Industrial Production m/m, Mortgage Delinquencies, Crude Oil Inventories, FOMC Meeting Minutes, Treasury Currency Report; NZD: PPI Input q/q; JPY: Preliminary GDP q/q
Thursday: AUD: MI Inflation Expectations; EUR: Spanish 10-year Bond Auction; CAD: Foreign Securities Purchases, Wholesale Sales m/m; USD: Unemployment Claims, Philly Fed Manufacturing Index
Friday: EUR: German PPI m/m; CAD: Core CPI m/m, CPI m/m; G8 Meetings
The Dow still can’t shake off the losing streak it set on at the beginning of the month. So far the American blue chip index has lost more than 500 points and is showing no signs of strengthening. The European economic woes, combined with the Greek instability are affecting the sentiment among investors and most of them prefer to stay on the sidelines in these troublesome times. The week ahead will be very important for the future direction of the market as data concerning the retail sales, building permits and unemployment claims are scheduled to be released. From a technical perspective the Dow is approaching the lows it reached in the beginning of April. They present the first major support level to be tested if we see continuing downward pressure. On the other hand the first major resistance is formed by the 25-period moving average which is currently moving around 12,956. The important from a psychological standpoint level of 13,000 is also acting as a resistance. The oscillators are currently not issuing any signals with the relative strength index and MACD close to oversold territory and the stochastic in mid-range.
The sell-off in the gold is continuing with the bears now taking full control of the market. After having a relatively low in terms of volatility Friday, the gold started the week with a strong push on the downside. It is currently marking low after low, trading at prices not seen since the end of last year. Investors seem to become more and more convinced that there won’t be a QE3, while at the same time inflation expectations are continuing to be at very low levels. That is prompting more and more analysts to turn to gold fundamentals for a fair valuation. And the fundamentals are showing that the gold is clearly overbought. From a technical perspective the oscillators are in oversold territory, which is indicating that a correction to the bearish trend is what we should expect in the near term. First support levels stand around 1530, while resistance is formed by the Friday highs at 1580. Binary traders are advised to be careful when entering in positions against the trend, because sharp drops are something very likely in this high-volatility market.
The currency pair continues to move downwards, but the sell-off seems to be losing its momentum, a sign of a possible trend-reversal. The volatility in the currency pair is certainly subdued with short-term downward pressure, quickly meeting with support from the bulls. We are still standing close to the lows, formed at May 9th, which are acting as a support level, but a possible sustainable break below 79.50 is seen as unlikely. On the other hand the 25-period and the 50-period moving averages are acting as resistance, which was broken for some time in Friday, but the break turned out to be unsustainable. The oscillators are in mid-range with the stochastic issuing sell signals, which were confirmed in early trading on Monday when the currency pair made a move of 40 pips. Binary traders are advised to take advantage of the low volatility by trading the close range, buying at the lows and selling at the highs.
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.