Binary Options Trading Recommendation for this week – Market Information and Trading Briefing
As is usually the case, trading volumes in all major asset classes has seen significant decreases in the last few weeks, as the Summer doldrums set in and many investors close up shop for short vacations. In some markets (stocks, in particular) these declines have been extreme with volumes seeing their lowest levels in more than 10 years (excluding holidays). Experience traders know, however, that decreased trading volumes like these can work both ways, creating either largely stagnant markets with volatility grinding to a near halt or opening the way for a smaller number of market players to affect prices and create large swings in asset values.
But looking at next week’s economic data, there is a strong possibility that the latter scenario is the one traders will face, as a variety of European growth reports could be the catalysts for a fresh directional move should these numbers disagree with market expectations. With stock markets and the Euro still attempting to make a sustainable bounce from their yearly lows, upside potential outweighs downside risks and any positive surprises could bring some renewed volatility to these markets.
Key Economic Releases to Watch
As investors look for reasons to buy back into markets at the cheaper levels that are currently available, economic data will be critical and there is an excellent chance that the releases next week could catch markets off-guard and bring renewed rallies. Specifically, these figures will come with GDP releases from Greece, France, Germany and the Euro region as a whole, with markets expecting weak numbers across the board.
As Greece is still viewed as being the major drag on Eurozone productivity and growth prospects, investors will need to see an improvement on the 7% contraction that is currently the market’s expectation (on an annualized basis) in order to push indexes like the DAX, CAC and Stoxx 600 higher.
But if this figure wasn’t enough to gain the market’s interest, surely the growth data to be released by the other EMU member nations will be sure to attract attention. These numbers will be released on Tuesday, with analysts expecting a contraction of 0.4% in the Eurozone as a whole and a small rise of 0.2% and 0.9% in France and Germany. This will be followed by Eurozone inflation data (both CPI and PPI), which will be made public on Thursday. With markets showing highly negative expectations for these reports, even small gains could be enough to turn markets around and set a positive tone for the month of August.
My Trading Recommendation in 50 Words
The Euro is trading near long term historical lows and this creates the opportunity for large move to the upside on longer term time horizons. I will be looking to buy 1 month CALL options in the EUR/USD if prices trade back into the 1.2050 area.