The USD /JPY pair has been on a relentless rise and many traders are voicing opinions that this can not go on forever. We beg to differ as the pair in our views is heading towards 125.00 in the long term. But until we get there there will inevitably be some setbacks.
Starting from the macroeconomic analysis there is a lot to be said about the Bank of Japan’s monetary policy action last week - the Japanese central bank decided to increase the pace of money printing and on top of that it promised to start buying riskier assets such as stocks and mortgages.
All of this led to a huge spike in volatility which resulted in the USD/JPY breaking to the upside and leaving everything in its path in shambles as the market relentlessly started selling Japanese yen and buying us dollars. The US dollar has benefited to day from a new form of risk sentiment which involved the midterm elections.
The Republican party has won a Senate majority and is now in full control of both houses of the US parliament. There is not telling how this might actually affect the economy in the long run, but generally republicans are perceived by the markets as more sound fiscal policy.
The euro setting itself for a move higher on Tuesday
As the final month of the year has started, we are seeing some serious moves taking place in binary options on the EUR/USD forex pair. While the European Central Bank prepares for its last meeting of the year on Thursday, the US data from the holiday season is weighing on the US dollar at this point in time.
The Euro has been fairly resilient in light of the weak economic data which came out of the Euro Zone this morning.The manufacturing PMI data from Germany came in at 49.5, which indicates that during the month of November the sector has actually contracted (this is conditional on above or below the 50 mark)
After this disappointing release, the Gross Domestic Product (GDP) of Italy also came in lower than expected which proved to be a crucial take away for economists. Many now claim that unless the Italian government engages in a substantial labor market reform, there won’t be chances for much growth in the long term.
Despite the data headwinds, the single European currency has shot higher today, topping out around 1.2506 before pulling back towards 1.2470 after influential U.S. central banker Dudley said that a rate hike in the United States in the first half of 2015 seems a reasonable scenario.
The British pound is consolidating before its next move
The British pound has been rallying modestly this morning after hitting a daily low around 1.5620 in early European trading. The main reason for the rally has been the optimistic picture drawn by the data set released from the UK this morning, however the US dollar remains resilient.
The latest move in the GBP/USD forex pair is somewhat weighing on the current market sentiment, however it will take a more substantial move in order for us to pick a market direction with confidence. The pair is stuck within a range and we would like to see a breakout in order to buy our binary options.
The UK’s services PMI number has improved markedly to 58.6 after dropping somewhat during the previous month (56.2). The number was initially dismissed by market participants, however after about an hour the GBP/USD biying picked up steam to drive the pair closer towards 1.5700.
EUR/USD gearing for its next move as the ECB leaves interest rates unchanged
The European Central Bank has just announced that it is leaving interest rates unchanged and traders are looking forward to the press conference by the President Mario Draghi who will unveil the next course of rates going forward and clarify the stance of the bank towards any further bond buying.
The Euro currency has been consolidating its losses throughout the Asian and European trading session so far. The European Central Bank has left rates unchanged and Mario Draghi will take the helm and push the EUR/USD pair into its next direction in about 20 minutes.
Before such a risky event we advise binary options traders to look carefully at the opportunities presented for them and pick the direction where the market goes to. It all depends on what Mr Draghi says now so don’t fight the ECB, just let the words of its president guide the market and follow it.
British pound poised for a rally against the US dollar
The British pound has performed well on Monday and we are holding the view here, at Binary Options Post that this rally is the first of a couple of days of nigher closes. As the UK interest rates path clears out we are looking at the GBP/USD pair halting its recent decline due to speculation about the Federal reserve hiking rates.
The GBP/USD currency pair has traded in a very interesting way throughout the day with the Britihs pound coming up on top and rallying some 0.5% and reversing its recent fortunes after the amazing non-farm payrolls report which the U.S. department of labor unveiled last Friday.
The pair started the day marking a new multi-month low around 1.5540, which was neglected by the bears and skipped as a factor in early London trading as the British pound rallied strongly throughout the whole day pretty much.
The decline during the Asian session was only repeated towards the end of U.S. trading, but the GBP/USD pair retreated only mildly to test the support level around 1.5645. Subsequently, the base held at that level and we are currently seeing a modest rebound towards 1.5655.
As risky assets across the board are being sold off, short positions in the Euro currency have also been diminishing in recent sessions. The EUR/USD exchange rate has marked quite a rally yesterday, however it proved to be short lived. After soaring initially towards 1.2450, the pair ended New York trading around 1.2380.
The main factor behind the US dollar weakness has been the sentiment on the global stock markets. Yesterday the Athens stock exchange has fallen 13% triggering liquidation of long positions across assets in the whole wide European Union stock markets.
With liquidity in the Euro Zone drying up, despite the persisting negative environment, the pair has benefitted from flows back into the single European currency. With the EUR/USD trading close to 13.5% lower this year we see a correction towards the end of the active trading period this year as more than likely.
As the Australian unemployment rate has hit a decade high of 6.3% this morning in Asian trading, the country’s economy created 42,700 jobs against an expectation predicting about 17,000. Despite this all the pair managed to do is revisit the highs around 0.8370 and present a put buying opportunity for vigilant traders.
The main question in the AUD/USD pair is the usual one - where are we going next? While several bulls on the pair have been expecting it to hold above 0.8300 in the near term, we are still seeing the Australian dollar underperforming across the board, primarily due to concern about China.
The case is no longer compelling to go long on the AUD/USD, but we have to note here that some big analysts are calling the bottom in this binary options forex pair. Morgan Stanley has announced yesterday that they are entering into a long position from 0.8300, targeting 0.8500.