Binary Options Weekly Outlook: May 26 – May 30

May 26, 2014 – Weekly News

 WEEKLY REPORT 26/05-30/05

EUR/USD

Last week the EUR/USD dropped more than 100 pips down. The European single currency has been under a lot of pressure since the German ZEW Economic sentiment showed that the strongest EU economy is slowing down. The data from Friday (German Ifo Business Climate) just supported the weakening and the EUR/USD slid below its support and touched 1.3612 level – the lowest since February 13^th. This week will probably start without higher volatility as the U.S. market remains closed after the weekend due to public holidays. However we should keep an eye on the GfK German Consumer Climate which will be released on Monday morning. On Tuesday the U.S Core Durable Goods Orders and CB Consumer Confidence will be announced. On Thursday some of the EU markets will be closed due to public holidays so we might see again lower volatility. During this week we will also see some speeches of ECB president Mario Draghi.

USD/JPY

The USD/JPY pair slightly reversed its downwards movement in the second half of the week and managed to climb up to 102 level. The pair moved down as the Yen strengthened due to good economic data and the speculations about possible additional monetary stimulus eased. However, the Japanese economic recovery is still weak and might need the stimulus later on anyway. That’s why we can see now the slight bullish movement. This week we should keep an eye on the Japanese Retail Sales data and Kuroda’s speech (on Wednesday) and Tokyo Core CPI (on Thursday). The inflation data are expected to increase by 2.9% spurred by increase of the taxes in April. If we see that the inflation has remained low we should see the pair going up.

GBP/USD

Last week the GBP/USD reversed the slight upper trend from previous week and decreased from 1.6920 to 1.6805. The British pound was earlier spurred by great U.K. economic data which could have been a reason for increasing interest rates soon. However, Mark Carney (BoE Governor) denied that Bank of England is thinking about earlier increase and that made pressure on the pair. This week we should expect no significant movement on Monday as both markets (U.K. and U.S.) will be closed. This week there should not be any important data coming out form U.K. market so we should be more watching the political situation after the European Parliamentary election and data from U.S.

GOLD

Gold has remained in a sideways movement and ranged between $1,283/ounce and closed and $1,305/ounce. The overall equilibrium seems to be around $1,295/ounce. The price reacted several times on escalating tension in Ukraine and Thailand but every time slid back down within that particular day. On the other hand we saw that the price fell several times on good U.S. data but always came back up. That points on indecision on the market. The price around $1,295/ounce seems to be fair for the market. We should keep an eye this week on the U.S. Core Durable Goods Orders and CB Consumer Confidence (on Tuesday) and GDP data (on Thursday).

Economics events (GMT time):