There Isn’t Bullish Reversal for USD
Srdan Sore
FOMC statement dovish tone was a confirmation of our view that further strong economic reports to be seen to force Fed sentiment change to hawkish. American currency still has the potential to weaken in the near future. Consumer inflation is the main report to be released soon. We bought 4 binary option with the US... Read more
FOMC statement dovish tone was a confirmation of our view that further strong economic reports to be seen to force Fed sentiment change to hawkish. American currency still has the potential to weaken in the near future. Consumer inflation is the main report to be released soon. We bought 4 binary option with the US dollar of 5 last week. Despite the fact that the US currency has not yet reached a turning point, we were buying mainly Call binary options on the US dollar at the rebound from the important price levels, using technical analysis in our work. Political Risks Are Increasing in Eurozone According to the short-term forecast, euro is going to trade within a narrow trading range but the picture remains bearish in the long term. Government bond yields difference is rising. Risk of Brexit continues to exert the negative influence, however populistic ideas increased in the region. For example, the takings on the referendum in Netherlands on the association agreement ratification with Ukraine. The rapid pace of Spanish and Italian bonds growth yield should be noted, which is a sign of vulnerability in southern Europe. We stuck to a neutral outlook on the single European currency, buying 1 Call option in favor of the euro and 1 – against. The technical picture of the euro contributed to the growth, but the heightened political uncertainty in the currency bloc has not given us the opportunity to bet on the euro. JPY Rally Continues Inflation expectations fall and the strength of the yen do not bode well for the policy provided by Shinzo Abe. If the Federal Reserve does not help the Japanese central bank, the yen may enter a new phase of growth. The return of foreign investors to Japan is provided by statistical data, although it seemed to be the opposite. Yen growth stimulates currency hedging more actively. Interbank lending market collapsed in Japan under the negative interest rates pressure, which is a positive factor for the yen because borrowing in foreign currencies and converting into the Japanese yen is more profitable hedging position now. Call binary option USDJPY pair was the only binary option with the Japanese yen, bought by us. Despite the continued growth of the Japanese currency, we made a deal against the yen based on the results of technical analysis. GBP Is an Outsider in the Big Ten GBPUSD was unable to keep its achievements unlike other currency pairs, so this pair remained between outsiders. Approaching of the referendum impacted negatively the pound sterling. Oil prices will continue to be unstable on the background of oil exporter countries meeting in Doha on April 17 that may have a negative impact on GBP. Inflation report release and Bank of England’s interest rates decision are the main events this week. Prospects for the pound are deteriorating against the background of growth in the number of supporters of the United Kingdom exit from the European Union. Because of the large uncertainty, we have practically not traded currency pairs with the pound and bought only one Call binary option on EURGBP currency pair. Bullish View on CAD We expect the optimistic comments tone to be provided by the Bank of Canada. Canadian central bank to release updated economic forecasts and this release should take into account the improvement in the economy in the 1st quarter and positive government financial incentives expectations. We still prefer Call binary options buying in the Canadian currency, unless further deterioration occurs. Nevertheless, weak economic data, released a week ago, causes a number of issues. Real exports from Canada fell by 3.5% after a significant increase achieved the previous month. USDCAD currency pair has twice participated in our trade last week. We bought a multi-directional binary options on this pair despite good prospects for growth in the Canadian currency on the background of bullish oil trend occurred last month. Temporary Stability of AUD Iron ore prices rising and hawkish tone of the Reserve Bank of Australia supported the Australian dollar few previous weeks. However, most recent reports, including retail sales, trade balance and building permits, indicated the weakness of the Australian economy in the 1st quarter. The central bank mentioned the Australian dollar in its statement for the first time in a year. We believe that Put binary options on AUDUSD growth are preferable because a threat of the further strengthening maintains and the likelihood of future interest rates reduction increases. We did not trade binary options on currency pairs with the Australian dollar last week, as Aussie dynamics in general were repeating the movement of the Canadian dollar and, taking into account a clear trend in the oil market, we have focused on the Canadian currency.

There Isn’t Bullish Reversal for USD

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FOMC statement dovish tone was a confirmation of our view that further strong economic reports to be seen to force Fed sentiment change to hawkish. American currency still has the potential to weaken in the near future. Consumer inflation is the main report to be released soon.

We bought 4 binary option with the US dollar of 5 last week. Despite the fact that the US currency has not yet reached a turning point, we were buying mainly Call binary options on the US dollar at the rebound from the important price levels, using technical analysis in our work.

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Political Risks Are Increasing in Eurozone

According to the short-term forecast, euro is going to trade within a narrow trading range but the picture remains bearish in the long term. Government bond yields difference is rising. Risk of Brexit continues to exert the negative influence, however populistic ideas increased in the region. For example, the takings on the referendum in Netherlands on the association agreement ratification with Ukraine. The rapid pace of Spanish and Italian bonds growth yield should be noted, which is a sign of vulnerability in southern Europe.

We stuck to a neutral outlook on the single European currency, buying 1 Call option in favor of the euro and 1 – against. The technical picture of the euro contributed to the growth, but the heightened political uncertainty in the currency bloc has not given us the opportunity to bet on the euro.

JPY Rally Continues

Inflation expectations fall and the strength of the yen do not bode well for the policy provided by Shinzo Abe. If the Federal Reserve does not help the Japanese central bank, the yen may enter a new phase of growth. The return of foreign investors to Japan is provided by statistical data, although it seemed to be the opposite. Yen growth stimulates currency hedging more actively. Interbank lending market collapsed in Japan under the negative interest rates pressure, which is a positive factor for the yen because borrowing in foreign currencies and converting into the Japanese yen is more profitable hedging position now.

Call binary option USDJPY pair was the only binary option with the Japanese yen, bought by us. Despite the continued growth of the Japanese currency, we made a deal against the yen based on the results of technical analysis.

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GBP Is an Outsider in the Big Ten

GBPUSD was unable to keep its achievements unlike other currency pairs, so this pair remained between outsiders. Approaching of the referendum impacted negatively the pound sterling. Oil prices will continue to be unstable on the background of oil exporter countries meeting in Doha on April 17 that may have a negative impact on GBP. Inflation report release and Bank of England’s interest rates decision are the main events this week.

Prospects for the pound are deteriorating against the background of growth in the number of supporters of the United Kingdom exit from the European Union. Because of the large uncertainty, we have practically not traded currency pairs with the pound and bought only one Call binary option on EURGBP currency pair.

Bullish View on CAD

We expect the optimistic comments tone to be provided by the Bank of Canada. Canadian central bank to release updated economic forecasts and this release should take into account the improvement in the economy in the 1st quarter and positive government financial incentives expectations. We still prefer Call binary options buying in the Canadian currency, unless further deterioration occurs. Nevertheless, weak economic data, released a week ago, causes a number of issues. Real exports from Canada fell by 3.5% after a significant increase achieved the previous month.

USDCAD currency pair has twice participated in our trade last week. We bought a multi-directional binary options on this pair despite good prospects for growth in the Canadian currency on the background of bullish oil trend occurred last month.

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Temporary Stability of AUD

Iron ore prices rising and hawkish tone of the Reserve Bank of Australia supported the Australian dollar few previous weeks. However, most recent reports, including retail sales, trade balance and building permits, indicated the weakness of the Australian economy in the 1st quarter. The central bank mentioned the Australian dollar in its statement for the first time in a year. We believe that Put binary options on AUDUSD growth are preferable because a threat of the further strengthening maintains and the likelihood of future interest rates reduction increases.

We did not trade binary options on currency pairs with the Australian dollar last week, as Aussie dynamics in general were repeating the movement of the Canadian dollar and, taking into account a clear trend in the oil market, we have focused on the Canadian currency.

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