Binary Options Weekly Outlook: April 7 – April 11

April 7, 2014 – Weekly Outlook

EUR/USD

Last week the EUR/USD pair first slightly increased due to worse-than-expected pre-NFP data. However, on Wednesday we already saw the pair erasing its previous gains as more and more investors speculated over possible ECB’s increase of interest rate. On Thursday, once ECB announced that its fiscal policy has remained unchanged the Euro weakened. That proves that investors are aware of higher risk of deflation which may lead to recession as we saw in Japan. Friday’s Non-farm payrolls came out slightly below expectation but we didn’t see any significant reaction on that particular pair. This week the pair starts slightly below 1.3700. The main event is FOMC meeting on Wednesday when we expect that Fed will withdraw another $10billion/month from the monetary stimulus. We should also keep an eye on U.S. JOLTS Job Opening (on Tuesday), ECB Monthly Bulletin (on Wednesday) and U.S. PPI (on Friday).

USD/JPY

The USD/JPY pair strengthened last week by almost 1.30% and touched the highest value (104.07) since January, however, once the Non-farm payrolls did not beat the expectation the pair slid to 103.20 area. The sentiment has remained bearish this week before BOJ will release its Monetary Policy Statement (Tuesday morning GMT). The surveys shows that the general expectation is the BOJ continues the same fiscal policy without any changes. If there will be announced any changes it would probably cause the Yen to drop and the pair to reach again the 104 level. We should pay attention then to FOMC minutes on Wednesday and Japanese Monetary Policy Meeting Minutes on Thursday.

GBP/USD

Last week the GBP/USD decreased from 1.6680 to 1.6570 means more than 100 pips. The British pound suffered on the ECB decision leave the current policy unchanged despite very low inflation (we also heard a new term from IMF director Lagarde “lowflation”). Even though the U.K. keeps its own currency, they are still depended on the EU decision which in this case hurt the pound. Also all of the U.K. PMI indices (Manufacturing, Construction and Services) came out last week below expectation which might point on slower economic recovery. This week we should pay attention to U.K. Manufacturing Production on Tuesday, the FOMC Meeting Minutes on Wednesday and the most important the U.K. Official Bank rate statement on Thursday.

GOLD

Last week after the price of Gold has continued its bearish movement and fell from $1,335/ounce to $1,286/ounce. The price dropped as the tension in Russia calmed down and traders of hedge funds withdrawing its previous investments. The physical demand should pick up with lower price, however, as we saw weak data from China the physical demand right now remains low. We should pay attention this week to U.S. data and mainly to Friday’s Non-farm payrolls. On Wednesday we should watch the speech of IMF member Lagarde about Global Economy in Washington. The same day Fed members Lockhart and Bullard will also hold a speech which might affect the price.

Economics events (GMT time):