USD Trading Outlook (11-02-2014)
Currencies
- The euro (EUR) continues moving higher against the US dollar (USD) after Friday’s Non-Farm Payroll release. The single currency has moved from a low of 1.3485 to 1.3659 over the past 5 days.
- The US dollar (USD) remains range bound against the Japanese yen (JPY), trading between 102.11 and 102.38. Markets anticipate today’s testimony by newly appointed Fed Chairman, Janet Yellen. Mrs Yellen was one of the keen supporters of Ben Bernanke’s quantitative easing programme.
Equities
- US equities rose over the week with the US500 (SPI) moving above 1799. Wall Street will be receptive today to remarks made by Janet Yellen in her testimony.
Commodities
- Oil prices are moving higher with WTI crude (OIL) rising above 100.04 as energy demand steepens. Oil prices had slid to as low as 91.40 over January before rising to retest resistance above 100 dollars per barrel.
Mover & Shaker with forex options
- Gold (XAU) continues to move higher against a weaker dollar as the US economy disappoints. The precious metal rose to 1287 overnight and may test resistance at 1293 should markets anticipate a more dovish tone by the new Fed Chairman.
- Options traders may consider constructing a Bull Call Spread on Gold which may appreciate in case gold moves higher.
- A Bull Call Spread can be constructed by purchasing an at-the-money Call and selling an out-of-the-money Call.
