› Weekly binary options technical forecast December 28, 2020 - January 01, 2021

Weekly binary options technical forecast December 28, 2020 - January 01, 2021

EUR / USD

2020 is finally coming to an end. Large-scale vaccination is gaining momentum around the world. Great Britain managed to "run into the last car" and conclude a trade deal with the EU under Brexit. US President Donald Trump has finally signed into law stimulating the economy and budgeting the state apparatus. There are only a few days left before the New Year and there are plenty of reasons for optimism.

Stock markets are growing and, it would seem, currencies should follow them, but only the euro, Swiss franc and Canadian dollar were limited to appreciation.
The single European currency was one of the strongest currencies of the outgoing year and is still in demand for several reasons. The euro benefits from the Brexit deal no less than the pound sterling, because a hard withdrawal of the United Kingdom from the EU would undermine the economic activity of both sides. The strict quarantine measures taken by France, Italy, Spain and the Netherlands have also borne fruit in a flattening of the coronavirus incidence curve. Yes, it is too early to draw conclusions, but the same dynamics of improvement can be expected in Germany.
Let's remember January of the outgoing year. Donald Trump's positions seemed unshakable, he achieved tax reform, brought China to its knees. The aggressive Republican's ratings were high, with many in no doubt that he would remain for a second term in the White House, but ineffective COVID-19 management led to the defeat of the 45th US president in the November elections. Trump, because of his sometimes inadequate decisions and statements, was a source of uncertainty, thanks to which the dollar grew. The pandemic provided him with a loss, that is, in fact, eliminated the uncertainty in the person of the US President and weakened the American currency.

This week's economic calendar is almost empty, with Thursday in most markets having a short trading day and Friday as a holiday to celebrate New Years. Therefore, you should take stock of the year and start, if you have not yet begun, plan the next one. Traditionally, the end and the beginning of each year is characterized by low liquidity, from which the risks of unreasonable movements increase, especially on currency pairs.

Therefore, it is better to diversify risks by going to safe-haven currencies such as the Swiss franc and the Japanese yen. We will consider the arguments in favor of the latter below.



USD/JPY

Continuing the above. Given the most likely drop in liquidity in the forex market as a whole, volatility in the US dollar / Japanese yen pair could increase significantly. You can recall the sudden collapse on January 3, 2019, as a result of which the USD / JPY pair collapsed from 108.90 to 104.80 in a matter of minutes.

In late 2019, USD / JPY, which was hovering around a 7-month high (the day after Christmas), fell sharply. There are not many events on the calendar that could provoke a powerful movement, however, year-end flows in conditions of low liquidity provide sufficient background for a surge in USD / JPY volatility.
But interest in the yen is possible only as a safe haven currency, in Japan itself is not particularly better than in any other developed country. A special interest in Japan is also because next year it is planned to host the Olympic and Paralympic Games in Tokyo. The World Championship has been postponed from this year due to the rapid spread of the coronavirus.
The Japanese government plans to take tough measures from January to March, to stabilize the epidemiological situation in the country, so that from April to June it will begin preparations for a global event.

According to the latest data, it is planned to adopt a third supplementary budget at an early stage in the Japanese parliament as soon as it starts working in January. Attention is focused on vaccination in the Land of the Rising Sun and on expanding the use of PCR tests.

Takeshi Shinnami, President of Suntory Holdings said, "We need a mechanism that allows anxious people to get tested many times at a low cost." “There is a great demand for tests in the private sector. The national government must support and lead to early detection. We will be doing business in Japan. We must take such action as soon as possible. "
The Olympic and Paralympic Games in Tokyo are slated for next summer. President Shinnami said that if the Olympic Games can be held with action to start vaccinations and end the corona, "it will be an important event not only for Japan, but for the whole world in terms of creating a strong momentum."

Gold
Goldman Sachs has issued an ambitious forecast for gold for 2021, as much as $ 2300 per troy ounce! Analysts of the world famous bank are relying on the fact that the recovery from the recession will lead to higher inflation next year.
The futures for this precious metal on the New York Stock Exchange this year reached a record $ 2074, some prefer to say "almost $ 2090" because it sounds more impressive.
Goldman economists believe inflation will hit 3% in 2021 and decline by the end of the year. The analysts of this bank state that the rise in asset prices will be driven by demand from traditional large buyers in India and China.
London Capital Economics is more modest in its forecasts, limiting itself to only $ 1900 per troy ounce, possibly slightly above this price level. The analysts of the company believe that the rise in inflation will put an end to a long period of low rates and force the central banks to revise their monetary policy towards increasing rates. This, in turn, will alienate investors from interest-free assets like gold.
But in many respects the opinion of the majority agrees on one thing - measures to support the US economy will become a determining factor for gold prices.
A titanic effort to approve a second bailout package in the US Senate this year suggests gold has a $ 2,000+ chance of getting out. To get down to business, the Biden administration must break the political deadlock that the current Republican-controlled Senate creates by blocking any bills to support the economy in the wake of the covid-19 pandemic.
The president-elect has already said he plans to propose to Congress for a broader stimulus package after his January 20 inauguration. If Democrats win Georgia's run-off election, Biden could go for two or even three stimulus packages to try and kick-start the US economic recovery.
If this scenario comes out, Goldman Sachs may be surprised by such a weak forecast of $ 2300.



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