This past trading week was a short one for North American binary options traders because of the long holiday in Canada and United States as countries were celebrating Labour Day on the first Monday of September. The absence of a significant part of the trading volume caused a little bullish retracement in EUR/USD with daily highs noticed at 1.1627 during the European trading session. The economic calendar was rather empty so all of the trading action was influenced mainly by technicals. The only exception was in Asia with the Australian economy reported a slowdown in retail sales together with enlargement in Companies corporate profits (2.0% versus 1.4% expected). New Zealand Export and Import prices in the second quarter were in red. Although, both Aussie and Kiwi were trading on PUT options mode. Japan reported a double-digit growth in Q2 Capital Spending but traders ignored that report initially. USD/JPY had a bullish retracement as well. All European Manufacturing PMI reports were weaker-than-expected in August which caused some volatility but it was limited though.
The real increase in volatility for binary options was noticed in Asian trading session on Tuesday early morning when Reserve Bank of Australia announced ‘unchanged’ verdict for the interest rates in the country. The rate decision statement was published at the same time and the regulators’ cautiousness regarding the economic outlook was apprehended as dovish by the traders and AUD/USD continued to tumble. The weekly high rate of 0.7235 turned into the daily low at 0.7155 in four hours time. Such a plunge was rather significant and despite the retracement which followed because of surprisingly strong GDP report (3.4% versus 2.8% expected) and a decrease in dollar demand across the board, AUD/USD was going South throughout the whole trading week. A 2-year low was posted as the weekly result and all that plunge started exactly from RBA decision and statement. Tuesday was also negative for sterling traders as GBP/USD went down to 1.2813. Binary options traders were buying PUT options for the pair on negative Manufacturing and Construction PMI and BRC Retail Sales Monitor. American traders went back to the market bringing the volume spike on positive ISM Manufacturing PMI report which also added CALL options demand for dollar index.
Wednesday started with Caixin Services PMI report which followed the Manufacturing PMI reported earlier. Both were negative and that could be a problem for the Chinese government together with weaker Yuan across the board. European binary options trading session was packed with important reports and most of them added pressure on Euro versus major currencies. So, French, Spanish, German and the European Union overall services PMI reports missed the market expectations. EU Retail Sales were in red as well: July Monthly change was -0.2% (-0.1% expected) and 1.1% yearly change was also weaker than analysts forecasted earlier (1.3%). In contradiction to the European Union, British reports were strong. Services PMI was published in positive territory: 54.3 versus 53.9. That difference caused increased CALL options’ demand for sterling. GBP/USD jumped almost 200 pips in four hours time. So short-term binary options traders had a good bargain of that. The Canadian dollar was in the market focus during on the American trading session. First of all, two important reports were published. Trade Balance had an improvement compared to the previous periods (-0.11B versus -0.74B) and Labour Productivity in the second quarter was also surprisingly strong (0.7% versus 0.2% expected). These reports were the last ones before the Bank of Canada rate decision which followed in two hours. USD/CAD was very volatile in those events but the overall direction was mostly CALL for the pair.
Thursday was a big day for the binary options market across the board. It started with several FOMC officials speaking overnight. All of them were hawkish about the U.S. economy perspective and that optimism added demand for the greenback. Australian positive Trade Balance did not help AUD/USD which kept falling on risk aversion. Fears and worries about the upcoming trade wars between the United States and China were renewed after Trump threatened to increase the import tariffs for $267B more. That was the main daily topic for all of the assets on the binary options market. EUR/USD went off the weekly highs around 1.1650 to 1.1600 support levels.
But the main trading day was on Friday as investors were waiting for the Non-Farm Payrolls reports in the United States. NFP main component was published in New York opening with 201K jobs added in August. That number was above the expected range (191K consensus). But more positive for the greenback was Average Hourly Earnings growth of 2.9% on yearly basis and 0.4% monthly. That never happened in almost a year and the lack of wage growth was one of the main concerns for the Federal Reserve to raise the interest rates more aggressively. Such an improvement created more rumours and talks among binary options traders about four rate hikes this year by the regulator. Dollar was the king on Friday. So EUR/USD tested 1.1540 support, GBP/USD pulled back down to 1.2914, USD/CAD almost breached 1.3200 level and AUD/USD was on 2-year lows at 0.7098. There were even no pullbacks on weekly closing so we believe the same tendency will continue during the next binary options trading week.