› Weekly Binary Options market review April 1 - 5

Weekly Binary Options market review April 1 - 5

Despite lower volatility, major assets continued this year’s trends in the binary options market. Traders and investors were massively buying call options for global stock indices and shares. Most significant gains were seen in German DAX 30 benchmark which soared more than 4%, paring most of the March’s losses. US stock indices reached levels before the market crash in October last year. Japanese, French and British benchmarks followed the risk-on trading mode. One of the most impressive rallies was noticed for WTI Crude and Brent Oil prices. The black gold surged another 5%, extending bullish achievements and opening new horizons. The fixed-income market stabilised, precious metals were hovering around the same levels. In the currencies market, call options were in demand for the US dollar, especially versus the Japanese yen on the back of demand for high-yield investments. EUR/USD, GBP/USD and AUD/USD remained almost flat, but the Canadian and New Zealand dollars were among the worst performers.

The first trading day of the second quarter was unusually busy as per Monday. The economic calendar was packed with important events. Japan kicked off the series of data with Tankan All-Big Industry CAPEX (+1.2% versus -0.4% expected) and other components of Tankan survey. The overall impression was mixed, and the data did not show any support to the Japanese yen, which continued weakening versus its major peers. Chinese Caixin Manufacturing PMI came in much better than expected, confirming that things aren’t that bad in the second largest world’s economy. That spike of the optimism lifted emerging markets across the globe as investors were rushing to jump in call options for high-yield assets. In contrast, European reports continued disappointing binary options traders. French, Italian, German and Eurozone Manufacturing PMI kept declining in March, pointing to an upcoming recession. As a result, the Euro weakened versus the US dollar. British Manufacturing PMI was strong, the Sterling was buoyant amid Brexit optimism. GBP/USD edged up towards 1.3100 resistance. US retail sales were published in the red, causing concern among equities investors. Manufacturing PMI and Business Inventories came in negative as well. However, Service PMI increased in March, and that good news helped binary options traders to absorb the negativeness.

Tuesday was the day of the Reserve Bank of Australia. The regulator met for the interest rate decision (unchanged, as expected) and the economic statement. Aussie traders noticed a significant change in RBA’s rhetoric, which was much more dovish than in the previous meeting. Chances of a rate cut this year increased t almost 80%, and the Aussie was hit hard. AUD/USD lost nearly 50 cents of the exchange rate on Monday. British Construction PMI declined, but that did not stop traders from buying call options for the Sterling versus many currencies. GBP/JPY, for example, strengthened another 100 pips on Tuesday as investors were hoping for the Brexit positive outcome. US durable goods orders were soft in February, declining by -1.6% while analysts were predicting -1.1%. January’s reading was revised down from 0.3% to 0.1%. The bullish rally of US equities was put on hold.

Weekly Binary Options market review April 1 - 5

Wednesday was the reversal point for many currency pairs. As long as the Australian Retail Sales report beaten market expectations with robust growth in March, traders decided to buy back call options for the Australian dollar. AUD/USD started to recover, while AUD/JPY accelerated the bullish run. European Services PMI bring a positive surprise for binary options traders focused on EUR/USD. The pair bounced off the double-bottom near 1.1181 and surged to the nearest technical resistance of 1.1250. British Services PMI was not so strong, and the Sterling started its way back south. US Markit Composite PMI and Services PMI reports made a sturdy trampoline for the greenback and stock indices as the growth was sustainable in March. US Crude Oil investors came in with unexpected jump in weekly oil stocks (more than 7 million barrels). The initial reaction was to buy put options for WTI Crude, but then traders reversed the price action and pushed it higher.

ECB published its meeting minutes, but that did not help Euro to hold previous gains and EUR/USD slid towards 1.1200 support. Canadian Ivey PMI showed an improvement in March, but the Loonie’s gains were limited and short-lived as the binary options market had a strong demand for the US dollar. FOMC Members Williams and Mester spoke late Thursday and investors were looking for any updates on the monetary policy in the United States. Fed’s officials only confirmed that the situation becomes more dependant on economic data. Volatility was comparatively low as traders and investors were expecting for the King of reports - US NFP.

Friday started with some weaker-than-expected Japanese data, and the yen kept weakening versus the greenback. German industrial production picked up the growth momentum in March, but traders mainly ignored that positive report. British Halifax Price Index was positive for the housing market in the UK. However, the Sterling was vulnerable to selling pressure on the back of another Brexit disappointment. The critical event of the week was the US Non-Farm Payrolls report. The market consensus was around 175K after the big miss of 20L in February. US labour market managed to beat the expectations and printed 196 thousand jobs added in March. The US dollar soared on the back of speculative flows. S&P 500, NASDAQ and DJIA benchmark rallied, finishing the trading week on a positive tone.

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