USD Trading Outlook (07-02-2014)

Currencies

• The euro (EUR) skyrocketed more than 130 pips reaching its weekly high at 1.3618 against the US dollar (USD). The president of the ECB, Mario Draghi, helped the single currency to advance by refraining to impose any further stimulus measures. He also gave a monthly notice to investors in order to analyse the impacts of lower inflation.
• Gold (XAU) range bound between the level of 1252 and 1262 US dollars per ounce. The precious metal remains constant awaiting for the US jobs to come out as China returns from the new year break.

Equities

• The US 500 (SPI) mounted from its four month low at 1731 all the way up to 1775 within two days. The index is now trading just below its resistance as claims for unemployment benefits fell and ahead of the NFP release.

Commodities

• WTI crude (OIL) advanced up to its monthly high at 98.81 and rose more than 2 US dollars yesterday. Better US economic data increased the demand for oil in the US, which is the biggest oil consumer.

Mover & Shaker with forex options

• The US dollar (USD) climbed all the way up to 102.22 from its three month low at 100.74 against the Japanese yen (JPY). The yen declined just before the US Non-Farm Payrolls and expectations show that the US added 185K additional jobs during the last month, amid speculation that the Fed may end asset purchases this year.
• Options traders may consider constructing a Long Straddle on USDJPY and take their positions before the NFP.
• A Long Straddle can be constructed by purchasing an at-the-money Call and Put on the pair.