Binary Options Weekly Outlook: October 20 – October 24

October 20, 2014 – Weekly Outlook

EUR/USD

The EUR/USD started last week trading sideways at 1.2600. U.S. Retail Sales data was released on Wednesday and caused a significant increase to 1.2880 and since then, the pair has ranged between 1.2725 and 1.2840. Remarks from FOMC members also affected the pair as they lowered the probability that the Fed would increase rates in July 2015, depreciating the Dollar.

This week traders should watch the U.S. Core CPI data on Wednesday and the EU Flash Manufacturing & Services data on Thursday. At the end of this week there will be a two-day summit of EU leaders including Angela Merkel and Francois Hollande who will discuss how to deal with recent economic issues.

GBP/USD

The GBP/USD dropped to 1.5875 which is almost a 1 year low. The pair reacted to weaker U.K. CPI data and the downtrend was also supported by very weak German ZEW Economic Sentiment. On Wednesday, the sentiment reversed and the pair finished the week back above 1.6100. There is speculation that the UK will be the first country from the G7 to increase interest rates as it now appears unlikely that the U.S. will take this step sooner. If this mood continues, the pair should continue with bullish sentiment.

This week, pay attention to Wednesday’s U.K. Official Bank Rate Votes. In August we saw two out of 9 votes in favour of increasing the interest rate. On Friday, the U.K. Preliminary GDP will be announced.

GOLD

For the past two weeks, Gold has traded with bullish sentiment following negativity on the stock market. As the global stock market plunged to 1 year lows demand for gold as a safe-haven asset picked up. Some analysts believe that this upwards movement could continue if the price goes above $1,250/ounce which will be our resistance level for this week.

Keep an eye on U.S. data and the situation on the stock market. The Chinese GDP data coming out on Tuesday will also be very important.

Economics events (GMT time):