Binary Options Trading Recommendation for this week – Market Information and Trading Briefing
Stock markets in Europe are higher for the eight consecutive week after the Chancellor of Germany and the President of France echoed previous comments from the head of the European Central Bank (ECB), suggesting that the regional financial authorities intend to do everything in their power to maintain the credibility of the Euro currency and keep the monetary union intact as it stands now. This was particularly bullish for European banking stocks with the previously weak Spanish bank Banco Santander (SAN) rising by nearly 15% on the supportive news. Spanish banks were the biggest gainers in the Stoxx Europe 600 Index as investors looked to buy back at lower levels.
In other banking news, Barclays (which had previously been fined after it received negative headlines in the latest LIBOR scandal) rose nearly 5% after releasing its 1H profits report, which soundly surpassed the consensus estimates of market analysts. These positive developments in the financials sector helped push the benchmark Stoxx 600 higher by 0.6 percent (to trade just below 260 last week), which is the 8th straight weekly advance. This is the largest span of weekly gains since the beginning of 2006 and the index has so far risen by 11% from the yearly lows that were posted on June 4th.
Markets Quietly Post Strong Gains
These latest gains are coming largely as a result of monetary policy easing from global central banks. Some of the most notable examples have from from interest rate decreases from the ECB as well as the central banks in China and Australia. But these trends are happening on a global level as well, with many other policy meeting statements suggesting that central banks worldwide are looking to stimulate economic growth.
The Stoxx 600 has quietly seen a steady rise of 3.4 percent so far in July but the main question is whether or not this will be able to continue into the summer doldrums that are likely to begin next month. Looking ahead, a great deal of directional bias will come from the next ECB strategy to initiate another program of bond purchases that are meant to lower funding costs in troubled European economies (particularly Spain and Italy).
Expect European equity to continue to push higher if these measures are enacted. Investors will pay a good deal of attention on any comments that are made with respect to these plans and any disappointments will likely bring back the bear trend that has been in place most of this year.
My Trading Recommendation in 50 Words
Gold is approaching critical technical resistance at 1635 and a break here will target areas much higher in the long term. Next week, I will wait for a break of this level, followed by a pullback to 1590 before placing a 1 month CALL option, targeting a rise back to the mid 1700s.