Will the EUR/USD go up or down?
The EUR/USD pair gapped enormously today on the news of the European Union bailout of Greece announced over the weekend. This powerful move broke through a very significant 4 month descending line of resistance and can only indicate further gains to the EUR/USD. Expect strong volume for this currency pair with important economic events from the U.S. throughout the week. Don’t miss out on this opportunity to make quick gains on the EUR/USD using Binary Options trading.
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1. American & Canadian Trade Balance: Published on Tuesday at 12:30 GMT. This double-feature event always shakes USD/CAD and the American figure, shakes all the majors. It’s expected to show a bigger deficit this time – over 38 billion dollars. USD/CAD parity continues to draw attention.
2. American CPI: Published on Wednesday at 12:30 GMT. Inflation is a key to raising interest rates and making the currency more attractive, but this probably won’t happen this time. CPI is expected to rise by 0.2% after remaining unchanged last time. Core CPI, which the Fed watches closely, is expected to rise by 0.1%, exactly like last month.
3. American Retail Sales: Published on Wednesday at 12:30 GMT, together with the CPI. Consumer behavior is felt strongly in retail sales. The hopes are high this time – Retail Sales are expected to rise by 1.1% after a small 0.3% rise last time, while Core Retail Sales are expected to be rise by 0.5% – more modest. Both releases mean very choppy trading.
4. Ben Bernanke talks: Begins testifying on Wednesday at 14:00 GMT. Bernanke arrives at the Joint Economic Committee and will lay out his economic outlook. Talking about the economy will definitely shake the dollar. Talks about interest rates will cause stronger moves and referring to the dollar will rock the markets, although this is highly unlikely.
5. American Unemployment Claims: Published on Thursday at 12:30 GMT. Last week saw a disappointment – a rise to 460K. This came after a steady improvement, week after week. This figure has proved to be the best indicator for the Non-Farm Payrolls. It’s expected to drop back to 439K this time.
6. American TIC Long-Term Purchases: Published on Thursday at 13:00 GMT. The flow of money into the US is a good gauge of confidence. After leaping above 120 billion three months ago, the figure rapidly squeezed afterwards, reaching 19.1 billion last time. The dollar needs another boost, over 20 billion, to rise.
7. American Philly Fed Manufacturing Index: Published on Thursday at 14:00 GMT. This important gauge of production has been on the rise in the past three months, ticking up to 18.9 points last time. It’s now predicted to take the next step and rise to 20.3 points.
8. European CPI: Published on Friday at 9:00 GMT. European prices are too stable for a rate hike in the foreseeable future. This is a burden on the Euro. CPI will probably be confirmed at an annual rise of 1.5% while Core CPI is expected to be revised from 0.8% to 0.9% – still quite low. The Euro still suffers from the Greek crisis.
9. American housing figures: Published on Friday at 12:30 GMT. Building Permits ticked up to 640K last month, slightly better than expected. So now, they’re predicted to slip back down to 630K. The complementary figure, Housing Starts, is expected to make a bigger move with a rise from 580K to 610K. If both figures surprise in the same direction, this will rock the markets.
10. American Consumer Sentiment: Published on Friday at 13:55 GMT. The University of Michigan publishes this important indicator close to the end of the day. After a few stable months, this figure is predicted to rise above 75 points, the highest since January 2008. Choppy trading is expected.
Disclaimer: Binary options trading might carry potential rewards, but also potential risks. You must be aware of the risks and willing to accept them in order to trade in the financial markets. Don’t trade with money you can’t afford to lose.
Start trading Forex ( FX) binary digital options
When an investor would like to place a forex binary option trading he would take under consideration the following factors:
- Trade time
- Spot price
- Strike price
- Forex (FX) binary option price valuation time
- Expiration time
Comparison of binary options premium pricing among binary options firms
It’s highly recommendable that the binary options trader will choose the firm he’s working with according to several parameters, one of them is the option premium collected by the binary options brokerage. Usually there are great variation in the premiums paid as this investment product is relatively new and not liquid as more mature investment products such as CFD’s and Spread Betting.
The difference between: In the Money, At the Money, and Out of the Money
While placing an option trading, the main focus of the forex trader is on the current price of the underlying asset, in our case the real-time spot price.
The spot price that also can be referred as the currency price is called at the money strike price.
The forex trader can purchase a binary option; the strike price will be one of the following:
In The Money (ITM)
As you already know, anything in the online trading reward is based on a gauge of risk and reward.
The trader has to choice a variety of strategies and risk and reward factors in order to match the best options strategy that will match his investment style and the risk level he’s willing to take.
Risk haters usually stick to in-the-money option positions while risk lovers are more attracted to out-of-the-money option positions. In case the trader purchased in-the-money option, the option will move in correlation with the underlying asset price (in our example the forex spot price). The main advantage of trading forex options in contrast to taking a fx spot position is that investor will pay only the premimum without any other risk, on the other hand the premium of in-the-money option is much higher
At The Money (ATM)
Describe when the options strike price is equal to the spot price, This will allow the investor to take a position which is really close to the market real price without paying the high premiums of In the money position.
Out the Money (OTM)
Trading out of the money options is extremely popular, the forex investor speculates on a scenario which is far from the real market price. The investor wishes for a sharp move that will cause his position will advance according to his prediction, to his strike price or hopefully will exceed his strike price and will become an in the money position.
Option Value vs. Time factor
By taking a forex option trade, the investor always see in his mind several dimensions that related to his predicted profitability and risk. The most important factors are:
1)The time factor-how much time is lest the option to expire
2)Volatility-which implicate the risk within the option position
The option is prices according to many factors which are reflected in the premium price.
The idea behind pricing options is so find cases in which an underlying asset is underpriced or overpriced because of factors that aren’t related to the market and can be used by the investor to take advantage to use this price arbitrage to make money as the market correlation is not systematic.
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