Binary Options Weekly Outlook: March 9 – March 13

March 9, 2015 – Weekly News

WEEKLY REPORT 9/3-13/3

EUR/USD

Last week the EUR/USD erased an impressive 400 pips and dropped from 1.1217 to 1.0817. The drop was widely expected as the European Central Bank was set to release details regarding the quantitative easing program which starts today. The bearish sentiment was supported by the strong U.S labour data which showed that 295,000 people were newly employed over the past month and the lowest unemployment rate since July 2008. Traders took the data as very positive for the Dollar despite the fact that Janet Yellen has repeated that the Fed will closely watch hourly earnings which have not yet reached pre – recession levels.

Several FOMC members have spoken over the past two weeks in support of hiking interest rates in summer. The continuing divergence of monetary policy could push the pair even lower. This week should be relatively quiet for the pair as there are only a few important fundamental releases taking place. Therefore, we recommend that investors trade technically at the beginning of the week.

GBP/USD

The GBP/USD dropped to a one month low and tested its support level at 1.5000. Even though the British economy has been performing well, the British pound weakened as the Euro-zone started quantitative easing program which placed downwards pressure on the sterling. The bearish sentiment was underlined by Friday’s strong U.S labour data which pushed the pair down 200 pips in just a few hours.

This week started with a slight upwards price correction. Volatility could be high due to a number of fundamental events. On Tuesday, the Governor of the Bank of England, Mark Carney, will be speaking. On Wednesday, U.K. Manufacturing Production will be released and should be slightly higher than last month. On Thursday, U.S. Retail Sales data is predicted to support the dollar with its highest reading in 3 months. Finally, on Friday, U.S. PPI data will be published together with the Preliminary UoM Consumer Sentiment index.

GOLD

Gold decreased to a 3-month low as the U.S. labour data showed high results. The price declined on the back of the stronger dollar due to speculation over the possible interest rate hike. Several FOMC members have now spoken about increasing interest rates in summer which has negatively affected the price of safe-haven assets.

The price could recover slightly this week as there are not many fundamental releases. Traders should pay attention to the U.S. stock market which dropped to a monthly low last week; if it reverses Gold could drop even further.

Economics events (GMT time):