Analytics › Weekly binary options technical forecast August 24 - 28

Weekly binary options technical forecast August 24 - 28

EUR/USD

August is coming to an end. Usually, at this time of year, the mood in the markets is calm. Most people rest, spending time with their families on vacation, because very soon the school year will begin. Yes, 2020 has made its adjustments, but the market activity, no matter how spinning, should be lower. This means that trading will be mostly in narrow trade corridors, and strong news will give an opportunity to break through the support/resistance level. We are talking about all assets, not just the main pair.

The U.S. dollar today is heavily oversold against many currencies, not only against the euro. The program of additional payments to unemployment benefits has expired, making it difficult for the U.S. economy to recover. This is evidenced by the slowdown in manufacturing activity in New York State and Philadelphia.

However, there are several releases on this week's economic calendar that could trigger a strong reaction from the participants. The focus will be on the Fed's head Jerome Powell's speech at the Jackson Hole symposium on Thursday-Friday. He has no choice but to take a cautious stance in his statements. After all, there are signs of economic recovery, but the decline in unemployment benefits will affect the purchasing power of the population, as follows
as a result, retail sales will fall.

Also expected this week is a revised estimate of U.S. GDP for the second quarter, as well as indicators of income and expenditure of individuals. July numbers are likely to be stronger than those for August. After all, consumption should have fallen markedly in recent weeks.

Germany, the first EU economy, reported a 9.7% contraction this morning. Consumer spending, company investments and exports fell sharply in the midst of the COVID-19 pandemic, according to the statistical office. The same agency added that the economic downturn was much stronger than during the financial crisis more than a decade ago. This is the sharpest decline in Germany's economy since 1970, when quarterly estimates of GDP began to be recorded.

"The second quarter was a complete disaster," says VP Bank chief economist Thomas Gitzel. "Regardless of whether it was an investment, private consumption, exports or even imports, everything was in a free fall.

Such a complex picture emerges. A week ago, investors were convinced that Europe was doing better than the United States, but today there is no certainty.

It is worth adding that new COVID-19 outbreaks were recorded in Spain, France and Germany. Let's talk about the race with the pandemic in the gold review.
In general, we expect to trade within the established trade corridor 1,175-1,187, with a possible breakthrough on the strong news listed above.

Weekly binary options technical forecast August 24 - 28

Gold

And now let's discuss the moods on the "front" of the fight against COVID-19. U.S. President Donald Trump instructed to allow coronavirus treatment with plasma from the blood of recovering people. During the Asian trading session on Monday, and all Monday, gold prices were declining, as the U.S. Food and Drug Administration (FDA) gave permission, as instructed by Trump.

Donald Trump, in his manner, accused the FDA of trying to slow down the development of the vaccine and methods of treatment of coronavirus until November 3, when the next U.S. presidential election, in which the incumbent president plans to re-election for a second term.

According to the Financial Times, the Trump administration is also considering bypassing standard procedures to expedite delivery of the experimental vaccine from the UK. The goal is simple and clear, to start vaccination before the election.

As we said before, new outbreaks of COVID-19 have been recorded in the EU. Last Wednesday there were 6671 new cases of coronavirus infection in Spain, 3776 in France and just over 1500 in Germany.

In addition to the news about the progress of the fight against the "crown", an important driver will be the speech of the Fed's head Jerome Powell in Jackson Hole. If Powell confirms that the Bank will move to an average inflation estimate, his words will support risk assets and put pressure on the dollar, gold and other assets of refuge.

Weekly binary options technical forecast August 24 - 28

OIL

Last Friday we learned from Baker Hughes that the number of drilling rigs in the U.S. has grown by 11 units. This is the first double-digit increase in rigs in the United States since February. However, the increase could increase concerns about doubtful demand prospects amid a coronavirus pandemic.

In fact, the number of rigs in the U.S. began to decline even before the coronavirus outbreak in the United States. It was the pandemic that became the main driver of the sharp decline in demand for black gold around the world.

This increase in the number of active drilling rigs tells us that the U.S. oil companies have adapted to the oil price at $40 per barrel.
As history shows, as well as common sense logic, the growth of drilling activity is followed by an increase in raw material production. As a result, flooding of the oil market with supply is inevitable. Especially considering the fact that OPEC and OPEC+ have already recognized the fact of flooding with supply at the moment. Adding these two factors, we get quite an obvious decline in black gold quotations.

But we should not jump to conclusions. High-ranking U.S. and Chinese trade representatives have confirmed their commitment to the trade deal on Phase 1, despite the fact that China is behind its trade commitments to buy American goods. The promise was made during a telephone conversation between U.S. trade representative Robert Lighthouse, U.S. Treasury Secretary Stephen Mnuchin and Chinese Deputy Prime Minister Liu He. This is the first official dialogue since May, amid fears that the deal could be jeopardized by a worsening situation between the U.S. and China.

"Both sides see progress and are determined to take the steps necessary to ensure the success of the agreement," the U.S. trade representative said in a statement.

The easing of trade tensions could offset the excess supply with counter demand. It is therefore worth watching the volume of purchases by China of U.S. goods and vice versa. Restoration of trade chains before the trade and coronavirus crisis will push oil quotations up.

Weekly binary options technical forecast August 24 - 28



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