As usual, I would like to take a quick look back at the last week of trading and take a closer look at a few of the most important events and decisions.
In the article "Trading binary options using market technology" mentioned that it would be sufficient for short-term trading if you knew and took note of important chart-technical brands. At the same time, I pointed out that a certain understanding of the markets can be very useful and, above all, very lucrative, which is one of the main reasons why there is a review and outlook on Fridays here.
After looking at and briefly analyzing events in the economy, a technical assessment of the markets will follow, as in the past.
The most important news of the past Week was the announcement by the FED that the interest rates could possibly be raised sooner than planned. The majority of the monetary policy committee wants to wait for further data, but assumes that the rate of unemployment will continue to rise as the unemployment rate continues to rise. The market is still assuming a rate hike in mid-2015, so such statements will continue to spur the market and have had a corresponding impact on the markets. The Dax continued to recover to currently 9400 points and the US dollar was able to maintain its position against the euro.
EU: Consumer sentiment continued to deteriorate significantly in the euro area and gave another 1.6 points to minus 10 points. The sentiment barometer is still above its average, but clearly posted the third time in a row.
Portugal: Portugal simply cannot get out of the negative headlines. Despite the government's austerity plans, the country's mountain of debt is growing. According to the Portuguese central bank, debt rose to EUR 223.3 billion.
Great Britain: The retail sales of British retailers fell far short of analysts' expectations at 0.1 percentage points. Compared to the previous year, this means only an increase of 2.6 percent with an expected 3.1 percent. In turn, inflation is weakening more than expected. The target is a rate of a good 2.0 percent. The inflation rate is currently given at 1.6 percent, so that reactions from the central bank can be expected here. The British pound then fell sharply.
USA: In contrast to Great Britain, the USA was able to achieve its inflation rate target, which is now at the planned 2.0 percent. And there are also positive things to report about the building permits and the start of construction. The government said that these rose unexpectedly, and the leading indicators also rose more than expected. The collective index rose by 0.9 percentage points, according to the expected 0.6 percent of the analysts and the well-observed Phily index brightened surprisingly strongly. After all these positive reports, it was ultimately a logical step that the majority of the FED as above described an earlier rate hike prospect.
Technical assessment of the markets
In view of the extremely positive developments in the USA and the weakening euro zone, in my opinion this is already the decision like. The movement of the Eur / Usd is clearly downward and the psychologically important 1.3300 mark has not held. This is currently being tested again from below and will in future count as a resistance range. The following scenarios are conceivable:
- The Eur / Usd only tests the 1.3300 mark from below and bounces off it. In this case, the price target would be in the range of 1.31000
- The 1.3300 does not hold and there is a return to the upper trend line at around 1.3370
A trend acceleration has also taken place for the British pound, which can be seen from the closely converging lines. The indicators have also reached an oversold area, so the currently visible green candle can be seen as a technical backlash. The following scenarios are conceivable here:
- The course of the Gbp / Usd continues to recover and bounces off the 1.6700 mark. This is currently the most likely move. The target price would be 1.6463
- The price continues to recover, can break the mark at 1.6700 and, as shown, rises to the red trend line
in mine Last Friday's analysis, I pointed out that breaking out of the sideways range would be difficult. However, it was not without reason that I noted that a strengthening of the US stock markets due to the correlation would have a strong impact on this forex pair. With the announcement of the FED protocol, the Usd / Jpy actually managed to impressively break the resistance mark with just two green day candles. Here the situation is as follows:
- The Usd / Jpy has reached another important mark at 104.05 and is heavily overbought. Overcoming this mark is therefore very unlikely for the time being. More likely is a rebound with subsequent return to the mark 102.78
- After a test of this mark, the price will either fall back into the old sideways range (not shown here) or rebound and run up again
As also indicated in the last week, the currency pair is strongly tied to external influences. Since the gold price had to continue to drop sharply, the price of the Usd / Cad could not overcome the marked resistance range, but rather rebounded. Here are the following options:
- It is most likely that the price will continue to go down. A stop at the lower blue line is not only conceivable, but also very likely. However, the price should only recover briefly and run to the upper red trend line at most.
- The price breaks through the blue line at 1.0875 and runs to the lower red trend line, bounces there and tests the blue line from below
The Truth About Binary Options 2,019!
Tips and information on retailing
The brands, supports and resistances given are, as always, to be understood as "areas". Here it makes sense to put in a small timeframe, in this case, for example, the 4-hour or hourly chart and to see how the course behaves. There are numerous orders executed on these brands, so that a candle alone has little meaningfulness. Rather, one speculates here on chain reactions and subsequent position resolutions of other market participants.
Using the example of the Usd / Jpy, I was able to show very clearly today that a combination of chart technology and business news can be a very worthwhile team. With binary options that can be traded well and fairly through OptionTime, you could have made a very nice profit here. However, as a trader you have to be able to change your position immediately if you notice that you are wrong.
Please note the risk warning.
Disclosure according to §34b WpHG : The author was not invested in the securities or underlyings discussed at the time of publication of this analysis.