Binary Options Weekly Outlook: May 12 – May 16

May 12, 2014- Weekly News

EUR/USD

Last week the EUR/USD pair started high despite very strong Non-farm payrolls. The pair then reacted on weaker U.S. Dollar which suffered as the U.S. stock slumped and on Tuesday managed to climb as high as 1.3950. In the second half of last week market was awaiting two main events – testimony of Janet Yellen and European central bank rate decision. What shook the market was conference of ECB’s president Mario Draghi after the ECB left the interest rates unchanged. Mario Draghi started in surprisingly hawkish tone pulling the pair almost to 1.4000, however then he noted that ECB is prepared to cut the interest rates in June. That statement send the pair more than 100 pips down and on Friday the bearishness pushed the pair to 1.3750. This week we should pay attention to speeches from ECB and Fed members. On Monday is about to speak Vitor Constancio and Ewald Nowotny. There will be also several important economic releases. On Tuesday the German ZEW Economic sentiment and U.S. Retail Sales. On Thursday the main data to watch will be Euro CPI and Janet Yellen will held a speech.

USD/JPY

The USD/JPY pair was traded last week below 102 level in a sideways movement. The pair increased on Friday despite the situation in Ukraine which seems to escalate. The Japanese Current account came out early on Monday morning and started the new week in slightly bullish sentiment for the pair (Yen weakened). The main data from Japan will be released on Wednesday when the BoJ releases Prelim GDP. The expectation is very high – 1% increase – which would be the highest since November 2011. On Thursday morning we should closely watch the speech of BoJ Governor Haruhiko Kuroda.

GBP/USD

Last week the GBP/USD reached new more than 4 year high and almost touched 1.7000 level. The pair was spurred by weaker U.S. Dollar as well as by great U.K. economic data (U.K. services PMI). The pair was also pulled up by expectation before Bank of England released its interest rate. As the monetary policy of BoE has remained unchanged the pair started to decline and with dropping Euro in the end of the week the British pound fell as well. The pair is currently around 1.6850. This week the main event will for pound will be the Claimant Count Change and Unemployment rate release on Wednesday. We saw that the U.K. labor market is very strong so we should expect some upper pressure before the actual release.

GOLD

Gold decreased last week from Tuesday’s high $1,315/ounce to Friday’s lows at $1,277/ounce. Gold first moved up as the U.S. stock market plunged and the tension in Ukraine escalated, however after testimony of Janet Yellen (despite the fact that it was more dovish) the price of Gold dropped. As we wrote before the price will hardly keep the price above $1,300/ounce if there will be no economic or political reason. We should expect that this week the price might react on continuing Ukraine tension as well as on U.S. fundamental data.

Economics events (GMT time):