USD Trading Outlook (03-02-2014)

Currencies

• The euro (EUR) slid down to its two month low at 1.3478 against the US dollar (USD). On Friday, worse than expected inflation data came out from Eurozone, indicating that theEuropean Central Bank (ECB) might ease monetary policy.
• Gold (XAU) lost more than 30 USD from previous week, forming a new support at 1237 US dollars an ounce. The precious metal lost its bullish momentum as there is lower demand from Asia during the lunar new year.

Equities

• The European equities declined as investors look that are shifting away from equities. TheUK 100 (FTS) fell from its high at 6515 down to 6364 on Friday.

Commodities

• WTI crude (OIL) rebounded up to 98.36 before collapsing down to 96.77 US dollars per barrel. Crude oil declined on speculation that demands from China will be reduced as there is slower economic growth.

Mover & Shaker with forex options

• The British Pound (GBP) continued its downside reaching its low at 1.6413 against the US dollar (USD) and dropped more than 200 pips within one week. The UK manufacturing PMI is on the calendar for today with forecasts at 57.1, anything lower may pave the way towards lower lows.
• Options traders may consider constructing a Bear Put Spread on GBPUSD if they expect the cable to move lower.
• A Bear Put Spread can be constructed by purchasing an at-the-money Put and selling an out-of-the-money Put on GBPUSD.