EURUSD. Unemployment Rate (Aug) Report + Nonfarm Payrolls (Aug) on the 2 of September 12:30 GMT

Will Unemployment Rate and Nonfarm Payrolls august reports positively affect US ecomomy? During her speech last Friday the FOMC chairman Janet Yellen said that the possibility of a refinancing rate hike is increasing, because the labour market data and the GDP are both on an excellent level. All that’s left to do is to solve some issues pertaining to boosting the inflation and the rate hikes can continue. 

It is important to emphasize that a new cycle of rate US rate hikes is one of the most anticipated global economic events at the moment, because it might have a positive impact on world economy. At the moment there is a floating rate in the US = 0.25%-0.50% and it expected that it will be increased either to a fixed value = 0.50% or it will be increased by another 25 basis points up to 0.50-0.75%.

It is vital for labor market statistics to remain on a decent level so that further rate hike would be possible. During the last two months unemployment rate remained on 4.8-4.9% level (significantly lower than target level = 6.0%) while the NonFarm data remain on a very high level (over 250,000):

If the latest unemployment rate figures don’t disappoint, it will have a positive effect on the US dollar.

EURUSD chart:

After the press-conference held by Janet Yellen last Friday, US Dollar significantly strengthened on EURUSD D1 chart and the lower line of an uptrend was broken. What is more, according to the indicator of technical analysis “CCI” the lower line (-100) was broken and it means that there is a high chance of further downward trend.

USDCAD. Canada’s GDP Report (31 August 12:30 GMT)

Thanks to the consolidation of oil prices – Canada’s main export – the country’s economy has stabilized. This enabled the government to revisit its goals and methods and to optimize the spending. Just like in the other countries where the main export is a raw material, Canada is trying to venture more into high-tech industries and reprofile the economy.

That’s why if the GDP growth data exceeds expectation, it will give the Canadian dollar a boost.

On 2nd of August crude oil price got back to 47.64 level from 39.15 (increased by 21.56%) and even tested psychological level = 49.00 before that. It had a positive impact on Canadian dollar.

USDCAD chart:

There is still a tiny upward trend on USDCAD D1 chart, but according to the indicators of technical analysis “Relative Strength Index” and “ADX” there are no factors have an impact on the rate, it means that fundamental factors prevail at the moment.

Trading signals 2016-08-29

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GBPUSD. UK Preliminary GDP Report (26 August 8:30 GMT)

Ever since the chairmen of Bank of England decided to cut the refinancing rate from 1.50% to 1.25%:

..England’s economy started showing signs of growth – inflation, retail sales and the level of unemployment as well as Producer Price Index significantly improved:

..while profitability of long-term bonds decreased. This tells us that economic risks are now significantly lower.

If GDP figures remain on a good level it will positively affect the price of Pound.

GBPUSD chart:

After the decision of representatives of Bank of England to cut the rate from 0.50% to 0.25% there are no massive price changed on GBPUSD D1 chart and the rate is moving in a narrow price range.

What is more, indicator of technical analysis “Relative Strength Index” proves it.

USDJPY. Japan’s Inflation Report (25 August 23:30 GMT)

Inflation is one of the more problematic aspects of Japanese economy at the moment. Low inflation level forces Bank of Japan to take unpopular measures – cutting the refinancing and interest rates, as well as introducing various monetary interventions.

Should the inflation figures turn out to be higher than previously expected, the Yen will likely get a boost.

Overall, due to the fact that Japanese Yen is increasing against the main currencies it is a perfect timing for representatives of Bank of Japan to apply unpopular economic measures, because it will help to boost the inflation as well as the overall economic growth. That is why some massive upward rate movements might occur on the price chart from time to time.

USDJPY chart:

The rate is still close to the most important psychological level = 100 on the USDJPY D1 chart (highlighted with orange). This level was tested couple of times lately, but it is yet to be broken (close price of these candlesticks is higher than specific level).

Still, there is a downward rate movement on the price chart (highlighted with yellow).

PIN BAR strategy

PIN BAR trading strategy

“IQ Option is gambling, lost it all”

Binary options are a hot topic at the moment, people search information online, read non-factual feedback and get scared away, we have therefore decided to come up with an article to clarify the difference between trading and gambling, as there is one.

In different countries regulators do not know whether to classify binary options as a financial instrument or gambling. This statement shows a shallow understanding of binary options as well as financial instruments and due to this fact we had to leave a number of countries lately, among them are Canada, Australia and Belgium as the latest. From today, that is August 18th, we have stopped providing services to both old and new customers from this country.

Gambling or financial instrument?

According to the Merriam-Webster dictionary, gambling is defined as “to bet on an uncertain outcome”. Isn’t trading any financial instrument according to this definition gambling? Well, it is if you are just looking at the outcome of one individual trade in isolation. If on the other hand, you are trading a system that has a positive expectancy then the outcome of a large enough number of trades is not uncertain anymore – you will be making profit.

The risk will always be there and the higher the payouts the riskier the investment is. With binary options, the payouts are high but the risk is fixed. You will never lose more than what you’ve invested in one position and with IQ Option the payout is always known in advance.

This is actually similar to bank deposits, you invest a certain amount of money, you may be protected up to a certain sum depending on your government, and the bank offers you a fixed annual percentage. However, with banks since the risk is relatively low so is the payout on those savings accounts. In most cases the payout doesn’t even cover inflation.

When you trade binary options, it is important to ask yourself:

1. What am I trading? If there is no system that can be developed that has a positive expectancy, then you are gambling and what you are “trading” is not a viable financial instrument.
2. How am I trading? If you trade any financial instrument without a strategy that has a positive expectancy, then you are gambling.
   
3. Let us take a look at a few examples to see whether you are gambling or trading.
   1. Playing the slot machines in a casino. This is clearly gambling as the odds are in the favor of the slot machines over time. If you play long enough you will always lose. The casino always wins.
   2. Trading options with a system that has a positive expectancy. This is clearly trading and not gambling as you will make money over time even though the outcome of any one trade is unknown.
   3. Trading assets without a system that has a positive expectancy. This is clearly gambling, as it is uncertain whether you will make money over time. So in this example, you can see that even though you are “trading” a financial instrument, what you are doing is still considered gambling.

   Some analysis can make a difference

   To sum up, if there does not exist a system of trading that has a positive expectancy, then you are gambling and what you are trading is not a financial instrument. Why? Because trading binary options includes risk management and both technical(indicators) and historical (news) analysis. Trading requires a lot of concentration and feeling of responsibility for the actions you take as there will be positive or negative consequences and you are solely responsible for them.
   Develop your trading system, build a strategy by training and learning, enhance your approach with analysis and don’t forget to address our support in case you need any advice on your profit line improvement.