Analytics › Weekly binary options technical forecast August 10 - 14

Weekly binary options technical forecast August 10 - 14

EUR/USD



The U.S. dollar has a chance to correct in the main pair, as well as to grow against other world currencies. Comparatively positive data on the labor market, especially when almost the entire market was confident of deterioration, as the dynamics of new cases of COVID-19 in the U.S. is impressive, give the American a chance to strengthen. Moreover, after such data (1763 thousand new jobs, wages rose by 0.2%, unemployment dropped to 10.2%), the Fed will not hurry with new easing to save the economy.

Overall, the markets are showing positive dynamics. A significant difference between expectations and actual data is a strong positive driver in recent weeks. According to FactSet, reports exceed expectations by more than 20%, which is the strongest position ever noticed in history since 2008.

However, it should be remembered that expectations were tremendously low due to the COVID-19 pandemic and its associated uncertainty. The U.S.'s actual jobs are 139.6 million, which is 12.9 million fewer than the February high. S&P500 companies report a 34% drop in profits, and revenues have fallen by almost 10%. This is the worst performance since 2009.

But, the Fed's soft policy and weak dollar feed the demand for US stocks. On Monday morning, futures on US indices remain close to local highs. I remember the phrase of John Maynard Keynes, the father of modern macroeconomics, "markets can remain irrational much longer than you are solvent."

A separate cause of volatility remains the upcoming U.S. elections, which have not yet impacted the markets, but things may change soon. The current US president, Donald Trump, is already proposing to extend the tax holidays from wages for those who receive less than 100 thousand dollars a year, which is 98% of the total population. He also promised to make tax holidays permanent and forgive Americans for their tax debts in case of re-election in November this year.

According to the incumbent President, unemployed Americans will also continue to receive $400 per week in the form of extended payments. Part of the expenses for this measure will fall on the states themselves. Trump said that the eviction for rental or mortgage debts would be suspended, and measures will be taken to ease the student loans.

It is worth noting that Donald Trump kept his promise from the previous election campaign and eased the tax burden for large and medium businesses for sure. Had it not been for the trade war with China, it would have been more tangible. Therefore, he may "bribe" many American voters with such statements.

The most important releases that can contribute to the auction will be for Europe: the economic sentiment in Germany and the EU, the EU's GDP estimate for the second quarter; for the US: consumer and core inflation in the US, and retail sales in the country.

Weekly binary options technical forecast August 10 - 14


Gold



Uncertainty in Congress about the approval of additional stimulus measures pushed gold to record highs, above $2,000 per troy ounce. The same driver dropped the US Treasury bond yields below 1%. The Federal Reserve System of States was not the last to blame as well, which by its support, keeps markets stable.

The markets remain volatile. Investors are trying to catch up everywhere, both in risky assets and safe ones. It should be taken into account that all the good news, from company income to covid-19 vaccine trials, is already included in quotes. The upcoming election news plus the Sino-American trade negotiations will do their part.

Some investors are switching to hedging their portfolios ahead of the November 3 US elections. The Vixx volatility index (also known as the "fear" index) has fallen to a five-month low. However, the spread between August's Vixx futures contract and October's is already 5.5 points, which is the largest spread since the beginning of trading in these contracts.

The increasing tension in the world will give a new impetus to the asset growth. But in the meantime, we are likely to see a correction in last week's growth. At least in the first half of this trading week.

Weekly binary options technical forecast August 10 - 14


Oil



The world's five largest oil companies in total reduced their assets by nearly 50 billion in the second quarter and reduced production rates, as the coronavirus pandemic caused a sharp drop in fuel prices and demand.
The sharp decline in asset values and lower production volumes shows the depth of the problems in the second quarter of this year. Demand for fuel decreased by more than 30% worldwide and still remains below the "coronavirus" level.

Some CEOs said that companies had to make massive write-offs because they expect demand to remain weak for several more quarters. People travel less and consume less fuel because of the ongoing pandemic, which has already claimed more than 700,000 lives worldwide.

Weak demand means oil producers have to revise their business plans, says Lee Manjinnisse, managing director of Alarez & Marsal. The goal should be to pump only what asks for profit over and above overhead, he added.

One of the oil giants (one of the five aforementioned), British BP, had previously said it planned to reduce its total production by about one million barrels per day by the end of 2030 from the current 3.6 million barrels per day.

At the same time, Saudi Arabia, represented by Saudi Aramco in the oil market, is already selling its oil at a 30-cent discount to the Asian market, which will push the quotes lower, in the long run.

An important factor in the oil market will be the resumption of US-China trade talks this Saturday. As it was mentioned in the review before, the relations between the parties are already tense. Nobody expects an escalation of the trade war, and at least, to U.S. President Donald Trump, it is not necessary now. After all, the next presidential election will be held very soon. But the nerves can "tickle". More information will be available by the end of the trading week.

Weekly binary options technical forecast August 10 - 14


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