Analytics › Weekly Binary Options market review Aug 20 - 24

Weekly Binary Options market review Aug 20 - 24

Most of the currencies were narrowing the trading range this past week as traders are getting closer to the end of summer vacation season. With the lack of major economic reports, talks and rumours were in focus of the market. The overall sentiment was shifting to a more positive tone as the geopolitical tensions were getting softer. The political topic came back to the United States though, with the investigation of Donald Trump’s recent presidential campaign had more results. The President’s former lawyer agreed to justify against his ex-boss and this situation might have a significant development for the greenback’s attractiveness as early as this Autumn. The U.S. dollar started to lose the recent bullish momentum across the board due to some unexpected dovishness from the Fed officials. In addition, the greed/fear barometer was shifting on the left side during the past trading week as the major stock indices kept rising. That caused some weakness in the greenback’s demand across the board and helped major currencies to keep recovering.

Monday trading session was traditionally quiet due to the absence of important economic reports. German PPI came out a bit weaker than it was expected on monthly basis (0.2% vs 0.4%) and flat on the yearly basis (3.0%). German Buba monthly economic report the Institute’s President Wieldmann’s speech was slightly optimistic for the biggest European economy. But all that had a little impact on the EUR/USD price action on Monday which was driven mostly by the greenback’s weakness. American economic calendar was completely empty. The only event that caught traders’ attention was the speech of Bank of Canada Governing Council member Wilkins who was not so dovish as Loonie bears could expect and USD/CAD started the trading week with losses.

Tuesday Asian trading session started with Australian Central bank’s statement from the previous meeting and that gave some support for AUD/USD which extended the recent recovery. RBA Governor Lowe’s speech also added optimism for the nearest future economic outlook. New Zealand reported growth in Credit Card spending in July with a positive revision for the previous period which also supported NZD/USD. British pound had also an extended recovery with some fresh air to breath which came from the EU main Brexit negotiator who expressed his optimism for the development in negotiations and confirmed the final stage of the process. The greenback price action was influenced by traders taking profits from recent call speculative positions due to some improvements in the U.S - China trade war topic. Risk appetite came back to the markets with equities rising and bond yields losing the recent attraction. Wholesale Sales in Canada were slightly down compared to the previous periods and that did not help Loonie bulls to extend the gains.

Brexit
Source: Telegraph


New Zealand reports were strong with both Retail Sales and Core Retail Sales managed to beat the market consensus (1.1% vs 0.4% and 1.4% vs 0.8% respectively). NZD/USD traded on the weekly highs on that positive news on Wednesday. Australian economic reports were strong as well but the politics came into play with new government announced. AUD/USD was trading lower on the political concerns and uncertainty about the new Prime Minister Scott Morrison. But losses were limited and Aussie managed to pare the losses closer to the end of the week. Japanese All Industries Activity index was down and that helped USD/JPY bulls to take the market under control. Japanese Yen remains one of the weakest currencies among the majors as its safe-haven role becomes less important. Emerging market’s recovery was led by the South African Rand recovery versus the greenback. Inflation report was a supportive factor (CPI 5.1% on yearly basis) and that added pressure to the central bank to raise interest rates. Retail Sales from Canada reported some slowdown which caused some pullback for USD/CAD. The United States Housing figures were weak and that report together with the negative trade balance are the main concerns for the Federal Reserve. The Fed minutes were released later on Wednesday and that statement was much more dovish than it was previously anticipated. Some doubts started to come across the market regarding the rate hike in December. The U.S. Crude Oil inventories were down in the last week and that was positive for the commodity price.

The market focus was shifted to Europe on Thursday. The Purchase Managers Index was mixed across the European countries with France leading the gains. European Manufacturing PMI was down to 54.6 versus 55.1 market consensus and that pushed EUR/USD back down. But the real bearish pressure came from the ECB minutes released later with the traditional dovish comments from the regulator. There are no signs of interest rates to rise in the nearest future in Europe. So bears came back to the market and they were dominating throughout the whole Thursday. American economic calendar was the busiest during the past week with Initial Jobless Claims confirmed the strong employment situation in the United States. The greenback was going up despite even weaker-than-expected Manufacturing PMI and New Home sales reports. Traders were trying to catch words from officials who gathered for the Jackson Hole Symposium. The U.S. dollar gained on the renewed rumours about four rate hikes this year from the Fed.

New Zealand trade balance started the Friday Asian session with a more positive tone for Kiwi traders and NZD/USD posted the largest growth throughout the whole week. USD/JPY bullish momentum was a bit lower though, despite the weak National Core CPI report in Japan (0.8% versus 0.9% expected). German GDP was in line with the expectations and EUR/USD was trading falt initially. But further Friday events turned everything on the right track back again. Gerome Powell, the Federal Reserve Chairman was speaking on Friday about next gradual rate hikes from the regulator but he expressed some concerns on the inflationary pressures easing somewhat and potential troubles from the negative trade balance and housing sector slowdown. Such an unexpected dovishness pushed the U.S. dollar to the weekly lows as investors started to doubt for the December rate hike. The treasury yields were weakening as well but equities took that news as a positive sign to keep the annual growth.


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