Analytics › Weekly binary options technical forecast October 12 - 16

Weekly binary options technical forecast October 12 - 16

EUR / USD

After surpassing expectations for US companies in the second quarter, the third quarter will show whether the gloomy forecasts for the company's bottom line came true.

Most sectors will again show a sharp drop in earnings, but this should be less sharp than in the previous quarter. That decline is expected to average 21%, compared with a 31% decline in the second quarter, when massive coronavirus lockdowns disrupted economic activity.

Energy companies are doing the worst, according to Refinitiv, with profits down 115% from last year. Revenues for tech companies are forecast to fall just 0.5%.

American bank Citi will report first on Tuesday. Profits are expected to decline by an average of 19%, but it is hoped that after two quarters of significant provisions for NPLs, potential loan losses will be largely covered. Also, pressure on banks is exerted by record low interest rates, which may also affect the bottom line.

If the beginning of the reporting season in the US turns out to be better than expected, it will increase the demand for the US dollar, which will be bought in order to buy shares of the reported banks.

Also on the agenda is an agreement on a financial assistance package to combat coronavirus in the United States. US House Speaker Nancy Pelosi and Treasury Secretary Stephen Mnuchin were unable to reach a consensus last Friday. The opinion that there will be no help until the elections is growing with confidence.

However, incumbent US President Donald Trump says he would like to see a larger stimulus package. He appears to be hoping for an agreement on legislation before the elections, which would help his re-election.

Tuesday will be even more interesting with data on the consumer price index in the United States. The weekly jobless claims report is due out on Thursday and while the indicator was the lowest since the lockdown last week, it remains at a historic high. At the end of the week, data on retail sales in the US for September is expected; it is also a rather volatile indicator.

In the EU, the week will begin with a speech by the head of the ECB Christine Lagarde and several other politicians of the European regulator. During the five-day trade, we will learn about the volume of industrial production in the EU, as well as about core and consumer inflation. Particular attention will be paid to the EU summit, on the agenda of which the issue of Brexit will be. The summit will be held on October 15-16, we will consider in more detail in the review of the pound sterling.

The determining driver for the main pair this week will be the risk appetite of market participants.

GBP / USD

The UK post-Brexit EU trade deadline is approaching. The agreement is outlined, but will there be common ground? The EU summit on October 15-16 will dot and evaluate progress.

Negotiators warn of the enormous amount of textual work, even if the deal is struck. There is a rumor that the EU is preparing for negotiations that will last until mid-November.

French President Emmanuel Macron and other EU leaders are pushing for strong enforcement in a trade agreement with Britain. At the EU summit, EU chief negotiator Michel Branier must make sure that there is a “level playing field” for European and British companies and that a quick response is possible in the event of violations.

Fishing is at the center of the dispute. Who is allowed to fish in British waters and under what conditions. France and other fishing countries insist that they still have corresponding pre-set quotas. The UK is seeking regulation based on the example of Norway, where quotas are re-set every year.

This Monday morning, the Bank of England has already begun to reinsure itself against the unexpected. The Central Bank of Great Britain has asked banks for information about their readiness to move to zero or negative interest rates. BA announced last month that it would be considering keeping rates below zero if necessary.

“As part of this work, we are asking for specific information about your company's current readiness to deal with a zero bank rate, negative bank rate or tiered reward system for reserves - and the steps you need to take to prepare for this,” said the Deputy Chairman of the Bank England Sam Woods in a letter to banks.

The epic Brexit is clearly approaching an important climax, with volatility expected to surge in pound pairs by Thursday.

 

 

OIL

Black gold prices fell on Monday morning as the force majeure in Libya exhausted itself, the strikes in Norway stopped, and in the US producers began to restore production after hurricane Delta.

Production in Libya, a member of OPEC, is expected to rise to 355,000 barrels a day after restrictions were lifted on the Sharara oil field on Sunday due to the recent armed conflict.

The rise in production in Libya will be a challenge for OPEC + producers and their efforts to limit supply to maintain prices.

“If the recovery in oil demand continues to be hampered by new or stricter covid-19 mitigation measures, the OPEC + group of producers will have to rethink their planned supply cuts,” said Harry Chilinguirian, an analyst at BNP Paribas.

Oil prices have been under pressure in recent months to break above $ 44, and fell last Friday after Norwegian companies struck a deal with union officials, ending a strike that threatened to cut the country's oil and gas production by nearly 25%.

Hurricane Delta, the biggest blow to power generation in the US Gulf of Mexico in 15 years, was downgraded to a post tropical cyclone over the weekend. Workers returned to production platforms on Sunday, while Total SA began work to restart its 225,500 bpd refinery in Port Arthur, Texas.

Prices are also being pushed by a spike in the number of new cases of covid-19, which raises the risk of new blockages. The infection is at an all-time high in the US Midwest, and British Prime Minister Boris Johnson will announce new restrictive measures in his country in the coming days. Italy is also preparing new nationwide restrictions.

From all of the above, it is not difficult to conclude that there is still nothing to increase oil prices. Of course, unforeseen events can introduce their own adjustments.


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