Analytics › Weekly binary options technical forecast August 17 - 21

Weekly binary options technical forecast August 17 - 21

EUR/USD



U.S. lawmakers have yet to reach consensus in negotiations on a new dose of incentives. The trillions of U.S. dollars introduced by the Federal Reserve and the massive increase in government spending have stopped the economic damage associated with the coronavirus. But because almost 30 million Americans are unemployed and the coronavirus is still spreading, Federal Reserve politicians warn that the recovery may stop.

U.S. stock indices are at record highs, waiting for Democrats to agree with Republicans. Otherwise, the Covid-19 will hit the American economy again.

Against this background, neither the growth of industrial production, nor the growth of retail sales in the USA to pre quarantine levels, nor even the largest job cuts in the EU in the history of observations, do not discourage investors from buying the euro against the dollar. Most investors are sure that everything is good in Europe, but the U.S. will not soon cope with the coronavirus.

It is also worth noting that the U.S. dollar is slowly losing its status as a reserve currency in the world. For example, the share of the U.S. currency in the calculations of foreign economic contracts between Russia and China has decreased to less than 50% for the first time. Just a few years ago, this indicator was at 90%. Countries that are under pressure from the U.S. are actively using dedollarization. It turns out that the U.S. has stepped on its own rake.

Relations between the U.S. and China are getting hotter, the parties even rescheduled a meeting scheduled for August 15 to assess the fulfillment of obligations under the trade agreement. However, it seems that the bulls in the main currency pair are no longer afraid of escalation of the trade conflict. On the contrary, many large investors believe that the share of Euro in the gold and foreign exchange reserves of central banks will grow under this scenario. This is the opinion of 40% of respondents to BofA Marrill Lynch asset managers.

Of course, history shows many examples when buyers' enthusiasm quickly broke in the opposite direction. However, watching the difficult epidemiological situation in the U.S., the gloomy forecasts of the Fed and the upcoming elections in the U.S. it is not surprising if the euro breaks through the nearest resistance at 1.19 and goes further up.

Volatility this week will be added by EU business activity data, as well as minutes of Fed and ECB meetings.

Weekly binary options technical forecast August 17 - 21

Gold



The fall of the American dollar by 5% last weeks caused the price of gold to rise above 2000 dollars per troy ounce. Apparently, the asset correction has exhausted itself, and investors are getting used to "expensive" gold.

Growing inflationary expectations contribute to the growth of hedging investment portfolios with assets such as gold. Refinitiv data shows that real yield on ten-year inflation-adjusted bonds in the U.S., UK, Germany and Japan is in the negative zone, for the first time for all these countries simultaneously.

The weakness of the American dollar is another growth incentive for the asset. As we mentioned in the main pair overview, the American is having a difficult time. The stock market is at its historic highs, while Tesla and Apple announced about the split of their stocks. This announcement woke up the history of the dot-com bubble, when companies actively divided their stocks into several new ones. Will this trend repeat itself?

The split will be reflected in U.S. stock indices and, of course, in gold prices.
Weekly binary options technical forecast August 17 - 21

OIL



Oil prices are traded in a narrow corridor of 40-42 U.S. dollars per barrel and are waiting for sufficient growth stimulus. And this driver may have appeared on the market.
Chinese state-owned oil companies pre-ordered tankers to carry at least 20 million barrels of American crude in August and September. China increased the purchase of American energy and agricultural products in anticipation of the revision of the Sino-US trade deal.

"The data on oil demand last week was mostly positive: the estimated demand for gasoline in the U.S. rose by 3.5% from pre quarantine levels, and the index of processed crude oil in China reached a record high level in July," - said Howie Li, an economist of the Singaporean bank OSV.

According to ANZ estimates, oil demand increased by 8 million barrels per day in the last four months to 88 million barrels per day. This level is 13 million barrels per day lower than the same period a year ago.
Investors are looking for more hints on future supplies at this week's meeting of a group of ministers from the Organization of the Petroleum Exporting Countries (OPEC) and its allies. The group will meet on August 19. It is likely that the focus will again be on meeting quotas.

At the same time, the number of oil and gas drilling rigs operating in the US remains at a record low. Not even looking at the fact that higher oil prices prompted some producers to start drilling again.

Weekly binary options technical forecast August 17 - 21


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