› Weekly Binary Options market review September 17 - 21

Weekly Binary Options market review September 17 - 21

Past trading week started with a quiet session in Asia, as Japanese traders were off for the holiday. Monday trading session in Europe was also comparatively calm in the sense of economic data released - European CPI came out exactly in line with the market expectations (2.0% yearly) and it did not have any significant impact on traders’ sentiment. Although market players were rather active especially in the stock sector and DAX index options were in CALL mode starting the five-days bullish run on Monday. The demand for other European indices was also growing and that momentum was forwarded also for the currency market. EUR/USD options were getting more expensive and the most heavy-weighted currency pair traded on a positive tone. The American trading session started with a disappointing NY Fed Empire State Manufacturing Index (19.0 versus 23.2 expected) and that did not add any support to the greenback. The Canadian dollar was also strengthening versus the U.S. dollar on more positive Foreign Securities Purchase report.

Tuesday was supportive for AUD/USD bulls with Reserve Bank of Australia published the recent minutes after the rate decision. Traders realized from the statement that things are not so scary as it seemed before and Aussie started recovering the losses from previous weeks. The overall risk appetite together with the expectations for BoJ rate decision next day pushed Japanese Yen to trade on a weaker tone despite the lack of important news from the country. Tuesday was the largest gain for USD/JPY and also cross rates like GBP/JPY and EUR/JPY. The lack of economic reports did not stop Euro bulls from the continuation of the same tendency and CALL options for single currency were dominant in the European trading session. In contrast, the U.S. dollar was trading in the PUT mode as the stock indices were approaching historical highs and greenback’s role as the safe haven eased. Loonie was also rising in the scope of stronger-than-expected Manufacturing Sales in July (0.9% versus 0.6% expected) and positive revision of the previous period (1.3% from 1.1%).

GBP/JPY
Source: binary-options-university.ru


CALL options were also dominant for New Zealand dollar on Wednesday despite some dovishness from the Current Account report. NZD/JPY was leading the gains among yen crosses initially right after Japanese officials published latest trade balance figures. So, Japanese exports grew 6.6% in August beating the economists’ expectations of 5.6%. Imports were also in green with the final reading of 15.4% versus 14.9% forecasted. The overall trade balance change in Japan was also positive for USD/JPY. That was the latest report before the BoJ meeting and binary options traders were anticipated to buy CALL options for most of the yen cross-rates. Australian officials were also worried about the AUD/USD plunge two weeks ago and RBA Governor Assistant Kent held a speech to support Aussie verbally. Next key event was the BoJ decision to leave the interest rates at low levels. The press conference did not contain something new. Regulator officials have got nothing to but to keep the same strategy due to the lack of inflationary pressures in the country. This strategy is also supportive for local exporters, therefore, it is in their best interest to keep the capital outflow. Wednesday was also the huge day for the British Pound, as economists were expecting inflation reports in the U.K. Yearly CPI (2.7%), Monthly CPI (0.7%), House price index (3.1%), PPI INput (0.5%) - all in green - these news added pressure on Bank of England to raise the interest rates much faster than they could suggest. Speculators reacted immediately buying CALL options for all of the pound pairs. Another important event was in the U.S. as the weekly crude oil inventories were published in favour of WTI crude oil bulls.

New Zealand was reporting the final revision of the second-quarter GDP and all of the figures were in green supporting kiwi CALL options. Top story was in Switzerland on Thursday as SNB held the interest rate decision. The regulator is concerned about the economy and keeps the interest rates at low levels. But the Swiss Franc is strengthening which goes in a divergence with the fundamentals. Some analysts noted an enlarged demand for CHF CALL options in the market due to the diversification process, especially from other European currencies. That creates an additional issue for central bankers, so verbal interventions are probably in the upcoming weeks. The biggest weekly gain was also noticed for sterling as the U.K. was reporting one more important economic piece of data - Retail Sales. Numbers jumped sharply in August and even July readings were revised up: 3.3% yearly versus 2.3% expected. This growth is telling a different story to investors than officials do. British economy is in better shape despite the Brexit uncertainty and pound assets are still attractive to invest, especially in the long-term bias. The four-days bullish spike of GBP/USD reached 200 pips on Thursday after stronger-than-expected Retail Sales report. Philadelphia Fed Manufacturing Index was also in green: 22.9 versus 17.0 market consensus. The U.S. economy is growing in a sustainable pace and the Federal Reserve has nothing to do except hiking the interest rates in order to avoid the economy overheating. The next meeting is scheduled for September 26 and 25 basis points hike is completely priced in by the market players.

Friday was ugly for most of the major currencies versus the greenback. It all started with negative European PMI report which showed a slow down in Purchase Managers’ activity. EUR/USD slid from weekly highs to 1.1750 and below. But the hardest hit came from British Prime Minister Theresa May who stated that she is not able to find any compromise with the EU in the scope of Brexit deal negotiations. Sterling crashed. GBP/USD dropped 200 pips wasting all of the weekly gains in eight-hours sell-off. Pound cross rates’ collapse was even more dramatic with GBP/JPY leading the losses. The only bright sign came from Canada. Retail Sales report was a positive surprise for USD/CAD bears and it was the only pair which remained flat on Friday. Greenback pared some of the weekly losses thanks to the U.S. Manufacturing PMI report (55.6 versus 55.0). Traders and investors look for the week ahead with the headline event of the Fed meeting.


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