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Last week the currency pair moved steadily on the upside as the prices of commodities declined. On Monday we started slow, trading in a tight range in the early hours of the session. The 0.97 level acted as a support, curbing the bears’ efforts to push the USD/CAD lower, while the 25-period moving average acted as a resistance. Investors, trading range in binary options profited from this movement in close boundaries, but their strategy lost its validity when the bulls finally took control of the market and sent the Loonie lower against its U.S. counterpart. The move to the upside was largely due to a decline in the prices of commodities, but also in part due to the worse-than-expected foreign securities purchases number. Analysts were projecting the value of domestic stocks, bonds and money-market assets purchased by foreigners to have risen to 11.30B, but instead they increased to just 6.67B. The currency pair finished its Monday session around the highs after encountering with some resistance at its 50-period moving average. It was a good level for traders of binary options to put as the rally was clearly running out of steam. Tuesday was a very choppy day with most of the trading occurring around the 50-period moving average. Neither the bulls, nor the bears were able to take a firm grasp of the market and as a result traders of range in binary options were once again the big winners. A good rate to enter in the option was the 50-period moving average, which stood at 0.9739. On Wednesday the sell-off in the higher-yielding currencies, including the Canadian dollar, continued as commodities took another hit after the crude oil inventories rose sharply by 8.5M barrels. The USD/CAD steadily moved to the upside, but its advance remained somewhat limited as some investors chose to put their money in the Loonie, running from the yen. This move came in a response to Bank of Japan’s decision to extend its bond-buying program by 10 trillion yens. Thursday was a pretty good day for traders of binary call options on the USD/CAD. The currency pair shot up, pushing above its 100-period moving average for a brief moment. Towards the end of the session, however, the rally ran out of the steam and the bulls scattered, giving way to the bears, which dominated the market for the rest of the day. The decline was in part due to the strong resistance at the 100-period moving average and in part due to some profit taking occurring ahead of the release of the closely monitored CPI figures on the following day. On Friday, the core CPI figures came in line with expectations, but the CPI numbers disappointed, rising by a modest 0.2%. At the same time the wholesale sales on a month over month basis dropped by 0.6%, which was their lowest reading since January. Analysts were projecting a much more modest dip of 0.1%. To make the matters worse, the reading for July was revised downwards – from -0.1% to -0.3%. After the news hit the wires investors shed their holdings in the Loonie, but even with this selling the USD/CAD was unable to reach the highs it touched on Thursday, finishing at 0.9760. This week the sell-off in the Canadian dollar continues as metal prices are extending their previous week’s declines. The USD/CAD is currently trading at 0.9807 after touching highs of 0.9815 earlier in the session. Traders, who want to profit from the movements in the currency pair should monitor closely the results from the reports that are scheduled to be released later in the week as they might have a significant impact over the direction of the USD/CAD. First we have the retail sales and the core retail sales, published on Tuesday, and later we have the GDP numbers, announced on Friday. Technically speaking, support in the currency pair is provided by the 100-period moving average around 0.9779, while resistance stands at the highs we touched in early September around 0.99. Oscillators are all trending higher with the relative strength index at 67 and the stochastic approaching overbought territory, currently standing at 74. The MACD is moving above the key 0 level, issuing mixed signals, which might indicate that the USD/CAD is looking for a direction. Source: binaryoption

The Reserve Bank of Australia left the key rate unchanged at the highest benchmark interest rate 3.5%. In Australia, “growth has been running close to trend, led by very large increases in capital spending in the resources sector,” Stevens said. After release of the news, Australian dollar rose from a six-week low. Binary AUD/USD is trading around 1.0273 at 6:00 GMT. The Asian stocks fell in the longest decline in six weeks, as the European Union’s outlook was cut by Moody’s Investors Service ahead of policy makers’ meetings. Today, the German Chancellor Angela Merkel welcomes the European Union President Herman Van Rompuy in Berlin. At the same time, the French President Francois Hollande is traveling to Rome for a visit with the Italian Prime Minister Mario Monti. They should give a hint about yesterday’s pronouncement of European Central Bank President Mario Draghi who told he would be comfortable buying three-year government bonds to bring down borrowing costs for nations in financial crisis. Euro made a test earlier this morning of topped high from the previous week. Expectations of analysts are that Euro would continue to rise against the dollar. British pound is near to the highest level since two weeks and extend his bullish movement. Swiss Franck made a test of sentiment zone around 0.9500 in later Asian session. Japanese yen is going in choppy range today. Binary Gold rose this morning to the $1674 for an ounce. This is the highest price of gold since 13th of March. The expectations are that precious metal would attack $1700 very soon. The Binary Silver made new fresh highs also with its strong up momentum. Binary traders could buy “call” or “touch up” options around 32.0280. European indexes close in plus yesterday. German DAX closes above 7000 points with +0.63% gain. French CAC 40 is up by 1.19% and British FTSE 100 made upside momentum yesterday and increased 46.93 points. Americans also closed in plus yesterday. Dow Jones Industrial closed up by 0.69% above 13000 points. NASDAQ Composite Index increased 18.25 points and closed the day at 3066.96. S&P 500 is again up by 1400 and finished the American session with 0.51% gain. EUR/USD Intraday bias in Binary EUR/USD is strong on the upside at this moment. Bullish trend from 1.2040 should extend to 1.2700 if we see break of topped high 1.2636. On the downside, only break and daily close below 1.2440 would change outlook to negative and we could see deeper decline. In the bigger picture, fall from 1.4939 is treated as a falling leg inside the consolidation pattern that started at 1.6039. In case of a break of 1.2747 resistance zone, stronger rise should be seen to 1.3486 resistance for confirmation. But before that, another decline could still be seen to 1.1875 and below. S&P 500 Broad American index is trading again in choppy range around 1400 points. Down border of the range is around 1395 and up is around 1412. In the long-term, the trend continues to be bullish with crucial level at 1350. The first support on down side is projected around 1395 followed by 1385. On the other direction, the first intraday resistance is around Wednesday’s high 1412. Price of the index should break above 1417 first and 1424 after that to unlock potentials for buy “call” options and start new positive rally. DAX Binary options on DAX index opened lower in earlier this morning. After yesterday’s up movement the sentiment is strong bullish with expectations of new sooner rise. The intraday support is at 6940 followed by 6890. On the upside, the first intraday resistance is around 7005 followed by 7050. A break of the last would unlock bullish potentials. Source: binaryoption

06:00 EUR German Gross Domestic Product Q2F (QoQ) Forecast: 0.3% Previous: 0.3% Change in the inflation-adjusted value of all goods and services produced by the economy. 06:00 EUR German Gross Domestic Product Q2F (YoY) Forecast: 1.0% Previous: 1.0% Change in the inflation-adjusted value of all goods and services produced by the economy. 07:30 EUR German Purchasing Manager Index Manufacturing August Forecast: 43.4 Previous: 43 Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy. 07:30 EUR German Purchasing Manager Index Services August Forecast: 50.1 Previous: 50.3 Level of a diffusion index based on surveyed purchasing managers in the services industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy. 12:30 USD Initial Jobless Claims August 18 Forecast: 365K Previous: 366K The number of individuals who filed for unemployment insurance for the first time during the past week. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. 14:00 USD New Home Sales July Forecast: 365K Previous: 350K Annualized number of new single-family homes that were sold during the previous month. It’s a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For example, furniture and appliances are purchased for the home, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction. 14:00 USD House Price Index June Forecast: 0.5% Previous: 0.8% Change in the purchase price of homes with mortgages backed by Fannie Mae and Freddie Mac. It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity. Source: binaryoption

The euro gained against the dollar o n Monday in a mostly technical rebound from a two-year low touched earlier in the session even as the single currency faces more headwinds from global growth concerns and the region's ongoing debt crisis. Euro zone finance chiefs were meeting to flesh out plans to reinforce their common currency, but investors are cautious the talks in Brussels may do little more than highlight the limitations of last month's deal to help indebted states and banks. Diminished summit hopes also weighed on Spanish and Italian bonds, with yields moving back up to unsustainable levels. One bright spot came as European Central Bank President Mario Draghi kept the door open to further interest rate cuts, saying the bank would make any decision on further action based on economic data. But investors cautioned it would not be enough to sustain gains. While lower rates typically reduce demand for a currency, with the euro zone struggling to maintain economic growth, any signs of action to stimulate the economy will be taken as positive by investors. For now though, investors were narrowly focused on the euro having fallen too far, too fast. As it regained some temporary footing, other investors who had bet against the euro were forced to buy to reduce losses, giving it more strength. "There's a significant amount of traders short euro and therefore it is not particularly unusual to see unexplained bursts of short-covering," said Kathy Lien, managing director of FX strategy at BK Asset Management. Currency speculators decreased their bets in favor of the U.S. dollar in the latest week, according to data from the Commodity Futures Trading Commission released on Monday. . The euro was last up 0.2 percent against the dollar at $1.2314 after climbing as high as $1.2324 and well off a low of $1.2255 hit in early trade. The dollar was last down 0.1 percent at 79.58 yen, moving away from a two-week high hit on Thursday, according to Reuters data. Pressure for action by European leaders is growing, but there are nagging concerns that decisions on issues such as banking supervision, how to use Europe's rescue money, aid to Spain and Cyprus, and whether to grant concessions to Greece may take months to finalize. "The market's overall cautious mood and a rise in Spanish and Italian bond yields are weighing on the euro, although reports that Spain's budget targets may be relaxed is perhaps providing a partial offset," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York. "For the week ahead we expect some consolidation in FX markets, with an overall neutral directional view on the U.S. dollar and other currencies," he said. Strategists said further rises in Spanish and Italian bond yields could push the euro down further, potentially bringing the 2010 low into view. European ministers were set to grant Spain an extra year to reach its deficit targets in exchange for further budget savings but remained far from pinning down details of bank rescues and emergency bond-buying that are of greater concern to markets. reuters

In Iraq, where barely anyone has a bank account, the trade in foreign currencies is largely unlicensed. Now money traders are smuggling US dollars to sanctioned Syria and Iran. And the Iraqi govt may well be using the situation for its own political ends too, according to this report from NIQASH. The Iraqi dinar is at risk. That is the pronouncement made by Khadir Sadoun, who sits on the sidewalk in the upmarket Arasat neighbourhood in central Baghdad. But Sadoun didnt study business or economics, he probably doesnt even know about the sanctions on Iran and Syria that are causing the risks he is talking about. In fact, it is the market place has taught him all he knows. And my business is flourishing, Sadoun adds, as he wraps a rubber band around a pile of currency. For the first time in years, Iraqis are exchanging their local dinars for US dollars in this way, the trader said, indicating the large piles of cash he was working with. Over the past few weeks, the market exchange rate has seen the Iraqi dinar plummet against the US dollar. In part this is due to the current, increased demand for the US dollar. This is regional: international sanctions have been imposed on two of Iraqs neighbours, Iran and Syria, and, as local analyst, Basim Antoin, explained: over the past few months theres been an increase in currency smuggling and this has led to an increase in demand for the US dollar. Both Syria and Iran are suffering from a severe economic crisis because of international sanctions imposed upon them, economic strategist and Iraqs former Minister of Planning, Mahdi Al-Hafez, said. This is why they are coming to the Iraqi market in search of hard currency. iraq-businessnews