Currencies
- The euro (EUR) rose towards 1.3619 against the US dollar (USD). The single currency gained yesterday even after president of European Central Bank (ECB) Mario Draghi warned about currency appreciation is a “risk to the sustainability of the recovery”.
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The US dollar (USD) climbed to 101.59 against the Japanese yen (JPY) before Fed Chairman Yellen’s testimony. Yellen is going to reveal more today about when the central bank will raise interest rates.
Equities
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US equities gained yesterday. The US 500 (SPI) advanced to 1971, the US 30 (DOW) went to 16987 and the USTech (NDQ) to 3923.
Commodities
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WTI crude (OIL) is near to its two-month low at 100.92 oil demand in the US remains low before the weekly inventory data announcement.
Mover & Shaker with FX Options
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The British Pound (GBP) crashed towards 1.7083 after reaching 1.7140. The pound is under pressure today as the yearly GBP Core CPI will be announced while later the Bank of England’s Governor Mark Carney will speak about the economy of the country. Markets are jittery while looking ahead to when the interest rates will be increased.
- Option traders may consider constructing a Back Spread Strategy with Puts on the GBPUSD and gain if the pair moves lower, while the risk is limited to the premium paid.
- A Back Spread Strategy with Puts can be constructed by selling an at the money Put while buying an out of the money Put at double amount.
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Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.