Analytics › Weekly binary options technical forecast September 21 - 25

Weekly binary options technical forecast September 21 - 25

EUR/USD

On Monday the markets were seriously shaken by the news of an increase in the number of new covid-19 infections in Europe. This figure reached a record level after quarantine measures were eased in the EU. Throughout the summer, everyone was frightened by the second wave of the pandemic and it seems to have started. Last Friday, Spain reported 14,300 new cases and France 13,500.

Many believe that the current situation is much worse than the first wave, when tough quarantine measures were introduced. And if you think logically, you begin to understand what the point is and why it is considered so. After severe social restrictions, the closure of catering establishments, entertainment complexes, the termination of international communication between countries, which caused a stunning shock to tourism around the world and so on, it is possible to enumerate for a long time, economies in many countries have just begun to recover, and in some countries there is still a depressed economy. It is not difficult to imagine what will happen if we allow another lockdown.

The bankruptcy of small and medium-sized businesses, which have been unable to adapt to the new realities, continues to be observed throughout the world, and Europe and the USA are no exception. But at the same time, new start-ups are growing up that have made the most of this situation.

The economic impact of the quarantine in April and May shows us that a second such quarantine represents a huge risk to the euro. Yesterday the main pair fell significantly to its nearest support level of 1.176 and today we are seeing repeated tests for the breakdown.

ECB head Christine Lagarde seems concerned about the situation when you think of her words about the uncertainty and unevenness of the EU economic recovery. The President of the Bank of the EU also reminded that the regulator still has incentive tools left if the ECB is asked to intervene. It is also worth noting that Lagarde had not previously worried about the euro, but she said yesterday that she was "closely watching the strengthening of the euro", which is already a serious reason for decline.

This week's economic calendar will not be happy with volatile news, only on Thursday will the ECB publish details of its LTRO quantitative easing programme. Therefore, in addition to the second wave of the pandemic, all attention will be focused on business activity.

In the USA, too, things are not so simple, due to the upcoming presidential elections. The election is getting closer, and given the death of a Supreme Court member, tough political battles are expected. Very much is at stake, and the political consequences will be significant. This uncertainty represents a serious risk for the foreign exchange and stock markets. In 2016, when Hillary Clinton took the lead in all polls, stocks fell well before the election itself.

US President Donald Trump wants to appoint a new Supreme Court member as soon as possible, so volatility could increase. For the USA, the economic calendar is also quite "calm", and the only thing worth paying attention to is the hearing of the head of the Federal Reserve Jerome Powell. The sentiment in the US stock market is a secondary focus, as investors seem to be trading based on their appetite for risk assets, one of which is company shares.

USD/CHF

Many central banks are trying to raise inflation and accelerate its growth, but the Swiss National Bank has the hardest time. Despite the world's lowest interest rates, its currencies are a popular asset shelter. Frank is at its five-year high, and Switzerland is experiencing its seventh month of annual deflation.

On Thursday, the NBS will hold a meeting on monetary policy and evaluation of the latter. The politicians are likely to abstain from new announcements and instead wait for the next step from the ECB. This year, as in the past, the Swiss National Bank is trying to lower the rate of the franc and as a result, the securities portfolio of US technology companies has only grown.

But these interventions may cause anger in the US in the person of its current president, Donald Trump. Switzerland is firmly entrenched in the list of countries that the United States is watching because of currency manipulation.
It is worth recalling that Trump publicly accused the Central Bank of China of devaluing the yuan in the midst of a trade war. But with Switzerland, the states are softer, so no sharp reaction is expected.

And in the currency market, despite all the efforts of the NBS, the franc is close to its five-year high against the euro and the US dollar.

Given the general sentiment, trading within a trading channel seems quite logical.

OIL

There are increasing uncertainties in the black gold market.

The Libyan National Oil Company cancelled the force majeure shutdown of ports and facilities that were closed for security reasons at previous entrances. However, the blockade of the raw material infrastructure, where militants with rebellious General Haftar are stationed, is still in force. A possible peace deal between the government and Libyan forces led by Haftar could bring an additional million barrels into the market.

In Riyadh, King Salman of Saudi Arabia is said to be in a difficult state and social networks are spreading rumours that the state is critical. Crown Prince Mohammed bin Salman is considered the most likely successor, but before his coronation there is considerable uncertainty about a possible power struggle among the Saudis.

At the same time, a new wave of covid-19 has erupted in Europe, as we have already talked about in the main pair (EUR/USD). This is why markets are nervous about the demand for fuel in countries such as the UK, France and Spain. In these countries, the government can introduce lockdown again, requiring people to work from home again. Spain even asked for help from the army, and Germany called the situation "alarming".

Crude oil prices, which fell by around 5% on Monday, also got some respite as Texas refineries remained open after a tropical storm was expected to continue to lose momentum, dispelling fears about demand for raw materials for US refineries.

Traders are also waiting for data from the American Petroleum Institute tonight (Tuesday) as well as official data from the Energy Information Agency tomorrow.

It is difficult to calculate the direction and mood of the oil market at the moment, but the new hints will help to find the right direction.


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