Binary Options Briefing for this week – Trading Tips and Market Info
By Richard Cox
Safe haven assets have seen rallies for most of the past 5 weeks but this momentum began to show signs of stalling into the weekly close last Friday. The one way declines in equity markets and high yielding currencies technically came to a close with the US Dollar finishing the week lower and stock indices making moderate pushes higher. This was helped, in part, by the policy easing measures that were enacted in China and Australia during the week, as central banks start to take a more dovish bias looking to encourage markets by stimulating growth prospects.
The main question going forward will be whether or not this bounce is of the “dead cat” variety and given the lack of follow-through, many chartist traders will likely use this bias as their foundation for establishing new positions during the open on Monday. Macro data is likely to be the key driver for short-term volatility, some some significant releases scheduled for release in both the US and the Eurozone. In addition to this, traders will also remain watchful of any new developments in Spain and Greece, as last week’s headlines opened the door for additional waves of risk aversion as we come to the end of the first half of 2012.
Fitch Downgrades Spain to BBB
With traders remaining fixated on news headlines, one of the key events last week was the decision by Fitch to lower the long term credit rating of Spain to BBB, which is a significant reduction of 3 ratings levels. This did little to encourage an already jittery market that is still waiting for the next election results in Greece as a means for determining whether or not Greece is likely to exit the European Monetary Union. Any negative headlines relative to either of these countries could easily send equity markets lower, so remain watchful of any political polling information out of Greece or stories of bank recapitalization in Spain.
Next week’s macro data will mostly center on inflation figures out of the US and Eurozone, with the Producer Price Index (PPI) scheduled for release in both regions and the Consumer Price Index scheduled for the US on Thursday. But while this is normally top tier information for markets, we could very well see more attention paid to manufacturing data, as this could be a better indication for traders with respect to the growth prospects that are possible for the remainder of the year.
My Trading Recommendation in 50 Words:
The latest rally in the AUD/USD came at critical support levels and the momentum was confirmed by a break of short term resistance at 0.9890. I will look for enter into short-term (1 day) call options in this pair, looking for a break back above parity.