Oil Prices Surge Above the $100 Mark on Falling Supplies
We saw the U.S. dollar end up making some very big losses during last week’s trading session. Investors were simply not in the mood to take risks when it came to going long on the greenback. The dollar ended up making very large losses versus the euro and the pound. Traders were not in the mood of buying into risky currencies. Instead, they bought into currencies which are deemed risky. Expect more of the same in the week ahead.
The European single currency rallied for a good part of the previous trading week on the hope that the economy of the region will improve. In fact, the euro climbed for six out of seven trading weeks, showing just how bullish traders are on the single currency at the moment. It is backed by the current account surplus widening to 21.8 billion euros in October, the highest level since 1997.
The pound sterling gained the most in two months versus the U.S. dollar during last week’s trading session. The pound gained versus 14 out of its 16 most traded currency counterparts. This came before a report in the week ahead which is expected to show that house prices and mortgage approvals climbed. It is also stated by a number of leading analysts that the economy will grow faster than forecasted.
U.S. equities were able to gain last week as U.S. data continued to improve. Moreover, there was positive data from other regions which ended to boosting Asian stocks too.
The Dow Jones and the S&P 500 did close at record level. The bad news is that these gains were cut on Friday. There was a feeling that the gains in the earlier part of the trading week were overdone.
In spite of the losses made by U.S. stocks and indices on Friday, we may see more strength in the days ahead.
The crude oil binary option climbed for yet another trading week. In fact, it gained notably post-Christmas Day. The commodity surged above $100 for the first time in two months following the U.S. posting a string of positive economic data. All this has come due to supplies sliding to the lowest level since September. Traders have taken the opportunity to go long on energies such as crude following the decision by the Federal Reserve to taper stimulus. The crude oil binary option has also gained ground as of late due to the dollar sliding notably versus the euro in the latter part of last week’s trading session.
Gold capped its longest winning streak in four months on the much weaker greenback. This comes after the yellow metal dipped below the $1200 mark. This shows just how quickly the situation can change in the commodities market. The reality is that with the haven currencies such as the USD and JPY sliding on an improving global economy, the time has come for traders to go long on the gold binary option. It may be that gold will be able to extend its gains next week.
We have seen the EUR/USD forex binary option go lower and lower during the previous week of trading. Investors have not felt that it was the time for them to go long. Instead, they have sold the pair on all fronts as data from the U.S. gets better and better. This is astonishing, as it was thought that the USD would gain following the stimulus measures. The EUR/USD is forecasted to slide further this coming week.