Where is the Euro Going?
Once again, the euro is at a low point, reaching a new low for the last 4.5 years. The head of the European Central Bank, Mario Draghi, has indicated that the ECB will be buying government bonds, indicating that interest rates will be going down, or at least staying put, for the time being. This should encourage more borrowing, and thus more spending, within European businesses. It’s a stark difference from what is going on in the United States, where interest rates are going to be going up soon.
It’s creating a unique situation where the two most widely traded currencies are going in completely different directions. In theory, this should make trading the currency pair a lot easier, but in reality, that’s not true over the short term. The euro is at a very low point right now, and the kneejerk reaction to this will likely be to go long with it, and since the U.S. dollar is the world’s most highly traded currency, this pair is likely to see the euro go up in value for a bit before things level off as true change kicks in.
Really, the dollar is the world’s strongest currency right now. Investors are poised to receive economic data soon, and the general consensus is that the joblessness rate in the U.S. is now at a 6.5 year low. This indicator has long been used to predict jumps in the value of a currency, and will likely give the dollar yet another boost. Once this happens, the euro will likely drop back down in price as reality sets in amongst short term traders.
Bounces in Forex prices like this are common, if only because the world is such a big marketplace and so many different events can affect the value of a currency. Some have a more lasting impact than others, and being able to anticipate this will give you an edge in your trading. Many Forex traders find that timing is tough when you are in the heat of the moment with a trade, and this has led a lot of Forex traders to supplement their routines with binary options since it installs a sense of discipline into the trading by solidifying the exit in stone before you even enter a position. When change is constant–like the current situation between the euro and the dollar is–this is a good safeguard to have on your side. It becomes even better if you can predict with a degree of accuracy how long certain changes will last.
The good news with binary options is that even tiny changes can produce big profits. You don’t need to worry about things like leverage or how many pips you can squeeze out of a trade before a certain time of day. Binaries need a single pip of movement in the right direction to give you the full profit. You’re not worrying about the amount of movement, just the direction here. There are other binaries to worry about besides the call and put if you wish that will look at this, but most people will never need to actually worry about them. If you are trading Forex pairs as binary options, your best choice to make consistent profits is to focus on direction and wait for the opportunities that allow you the highest degree of accuracy. In times like the current market, focusing on measured, yet tiny amounts of time, when making your trading choices will be your best bet. The built in and previously agreed upon expiries help you to regulate these changes much more closely.