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August 25, 2014 – Weekly News Update of Currency Trends – Binary Options

August 25, 2014 – Weekly News

WEEKLY REPORT 25/08-29/08


Last week the EUR/USD pair finally left the sideways movement and started to drop. First significant decrease we saw on Tuesday when the U.S. inflation and housing data came out above expectations and spurred the demand for Dollar. The pair broke through the 1.3300 level on Wednesday on strong positive speculation over the FOMC Meeting Minutes report and the last significant move we saw on Friday as Janet Yellen gave her hawkish talk in Jackson Hole. Despite the fact, she did not say anything new, she repeated the fact that Fed is prepared to increase the interest rates if the labour market data will be solid. The pair opened after the weekend with negative gap pushing the price below 1.3200 which means that within a week, the pair declined more about 200 pips! Mario Draghi who also gave a speech in Jackson Hole symposium, was more dovish and explained the drop in inflation due to Ukraine situation. This week will start with German Ifo Business Climate release which is expected to be the lowest in past 12 months. We should pay attention to the U.S. CB Consumer Confidence (on Tuesday), German CPI and U.S. GDP (on Thursday) and EU CPI (on Friday).


The USD/JPY pair increased last week from 102.30 to 104.10. The rapid increase was caused mainly by strengthening U.S. Dollar which climbed to its new 12-month high and it is not far from exceeding it and get to 14-month high. Last week we did not see so much economic data coming from Japan. However, this week we should see more volatility there as the Japanese inflation data, Industrial Production and Retail Sales will be released on Wednesday. On the side of Dollar we should keep an eye on the U.S. CB Consumer Confidence and U.S. GDP.


Last week the GBP/USD fell all the way to 1.6560 which is the lowest value since March. The pair has been decreasing for 7 weeks in a row as market seems to be disappointed by U.K. economic results which recently came out just below expectation. The pair might start the week will lower volatility as the U.K. market will remain closed due to public holiday. During the week we should pay attention more to the U.S. market as there are no important economic releases from U.K. market.


The price of gold fell last week from $1,303/ounce to $1,273/ounce. The price declined on the back of good U.S. economic data which spurred the positive speculation over the earlier U.S. interest rate hike. We already heard FOMC members saying that if the labour market improves solidly, the Fed is prepared to increase the interest rates. This hawkish statement were repeated in the symposium in Jackson Hole where the Fed Chairman Janet Yellen had a speech. These news are cutting the profits of the safe-haven assets as investors are seeking more risky assets. This week we should mainly pay attention to the Tuesday’s CB Consumer Confidence index and Thursday’s GDP release.

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