The euro has shown a downward weekly trend. Investors’ concerns, not fully confident in the final resolution of the current problems became the main reason for this favorable market response at first glance the news about the decision of the Greek issue and the country’s future place in the European Union. Despite the unity exhibited by the leaders of the European Union and the Greek government, Greek economy’s ability to endure the burden of accumulated debt and ensure timely payments on them in doubt at all, without exception, the world’s leading analysts. Performances of the population of this country, whose government was against the wishes of the people to not pay the debts and the attacks of the opposition, trying to take advantage of the tense situation do not add confidence to the bright economic future of Greece.
USD and JPY Are in the Center of Attention
Last week, we are actively traded binary options on the euro, the Japanese yen, the US dollar and the Australian dollar. So, we have opened seven positions on currency pairs with the euro and the yen, as well as six positions on currency pairs including the US dollar and the Australian dollar. We stuck mainly neutral outlook regarding the single European currency, opening 4 Call positions and 3 – Put. The Japanese yen fared about as well – 4 binary options were bought in favor of the currency, and 3 – against. We held a positive outlook regarding the US dollar, which trading statistics has shown – 5 Call binary options and only one – Put. As the history of trades, the decision was correct. The Australian dollar due to weakness amid falling prices for iron ore and coal traded by us 6 times with a Put option. Under the influence of the growing rate of the US dollar against the backdrop of ongoing discussions about the future not only of Greece in the European Union, but also of the whole European model of economic space, the euro subsequently fell again and ended the week at 1.0830. Last time we saw the European currency at this level on May 27 of this year against the background of unfavorable economic situation in Eurozone.
Greece Takes Second Place
The main driver of change in the European currency in the next week will be, without a doubt, the development of the situation around Greece. The continuing even after reaching agreement discussions between EU member states on how far they have to move in the rescue of a country that wants to be saved and does not want to remain a member of the Eurozone, deprived of analysts and investors confidence in a positive future settlement of the conflict. Given the weakness of commodity currencies – the Australian, New Zealand and Canadian dollars, we do not recommend buying Call binary options on pairs with these currencies until the end of this month. Interest rates decrease by the Bank of Canada last week, as well as a possible rate cut by the Reserve Bank of Australia and the Reserve Bank of New Zealand will provide long-term pressure on these currencies. Call options are recommended by currency pairs with GBP, which received a strong impetus to growth after the statements of Mark Carney to raise interest rates soon.
Carney Made GBP Stronger
British pound, starting at the beginning of last week from a mark of 1.5490, ended the week with an increase to the level of 1.5595. Despite the absence of positive figures in the reports of consumer inflation and wages index in the United Kingdom, on July 14 the British currency showed an increase of 175 points. This change of GBPUSD pair rate was dominant for the whole week. That day, Office for National Statistics published the results of inflation report in the UK, which was below forecasts. In the future, there was a performance of Bank of England Governor Mark Carney, in which he expressed confidence in the favorable development of the British economy in the short and medium terms. Forecasts of further increase in wages, which should stimulate the growth of labor productivity as well as expectations of growth in consumer prices in a controlled and supportive economy borders announced. In addition, Carney reported about a possible gradual increase in interest rates, which remain unchanged since March 2009. Overall, we expect a fairly quiet week for the British pound due to the absence of major news in the calendar, except the release of retail sales report in the UK. Regarding to this report, the optimistic forecasts on it could provide the local support for the British currency. Speech of the Bank of England Governor Mark Carney last week gives us reason to hope that positive forecasts come true. Therefore, our forecast is favorable for the British currency.
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