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CHINA COOLS THE MARKETS

FTSE F-DEC16 6745.750 08:00 06.12
USD/RUB 63.806 08:00 06.12
USD/CHF 1.00590 08:00 06.12
OIL-FEB17 (BRENT) 54.685 08:00 06.12
COPPER-NOV16 2.6553 08:00 06.12
NZD/CHF 0.71775 08:00 06.12
CAD/CHF 0.75864 08:00 06.12
NZD/USD 0.71357 08:00 06.12
EUR/AUD 1.44544 08:00 06.12
CAD/JPY 85.854 08:00 06.12
AUD/USD 0.74454 08:00 06.12
AUD/JPY 84.756 08:00 06.12
GBP/USD 1.27552 08:00 06.12
VTB BANK 0.068930 08:00 06.12
TENCENT HOLDINGS 190.150 08:00 06.12
ROSNEFT' 350.875 08:00 06.12
GOLD VS SILVER 69.8109 08:00 06.12
EUR/GBP 0.84379 08:00 06.12
OIL-JAN17(WTI CRUDE) 51.435 08:00 06.12
SILVER 16.805 08:00 06.12
GOLD/EUR 1090.185 08:00 06.12
GOLD 1173.311 08:00 06.12
NASDAQ F-DEC16 4779.125 08:00 06.12
GOLD VS OIL 21.4558 08:00 06.12
USD/CAD 1.32590 08:00 06.12
S.BANK INDIA 259.675 08:00 06.12
AXIS BANK 460.725 08:00 06.12
TATA STEEL 414.100 08:00 06.12
TATA MOTORS 443.150 08:00 06.12
NIFTY F-OCT16 8181.500 08:00 06.12
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By: Adam Stone
July 9th 2014 4:44am GMT, London UK
 

Despite our, and most analyst, expectations for continued optimism in the markets, the Chinese economic came and doused our flame. It seems that the Chinese economy is in a worse state than previously perceived at least in so far as China’s consumer price index (CPI) data is concerned. The indicator showed an increase of 2.3 percent in June from a year earlier which is lower than the consensus forecast of 2.4 percent. The drop is yielding a wave of negativity throughout Asia with the NIKKEI dropping 0.37% to 15257 and eliminating our binary options analysis from yesterday, which still might be relevant later in the week – but certainly not in the coming 24 hours. But this certainly doesn’t explain why the US assets were on the way down well before the announcement in China.

The S&P index in the US fell again, for the second straight session, and this time lost an additional 0.7% to 1963. The sharp move lower eliminated our hopes for a binary options strategy here as well.

The S&P was expected to make a move for binary options traders above 2000 but we are assuming this is some sort of market based fear of heights and the vertigo associated with it will come to pass rather quickly. For binary options traders, the actual direction of a particular asset is of little consequence, but traders are always looking for the asset with the biggest trend to latch on to. With the S&P heading up, this was an easy target but once the asset starts to correct and gains are receded, it was all for nought. So binary options traders are now forced to look for the next best thing and in today’s session, it’s likely to be forex pairs to rule the roost.

The EUR/USD, which has been trending higher over the last 3 sessions, looks to do more of the same. With Chinese figures pushing down Asian markets, a run towards the EUR looks very favorable. So look for the EUR/USD to push towards the high end of the channel resistance today, above 1.3620. The current support level is based on the channel support at 1.3598 but this is quite a far distance away from current level. In fact, we don’t even expect this level to be tested today seeing as how the pressure in on the USD at the moment and it’s weighing the dollar down with no end in sight over the coming 6-12 hours. According to the charts, the trend higher looks well established now for short term trades in the direction. Look for a break above 1.3620 in the coming 2-3 hours to start taking up options. However, until such a break is seen, reversal strategies will likely try to take advantage of the short term double top seen on the 15 minute charts.

EURUSD with Binary Options 9-7-2014

Look for down options with small and short based trades until a break is seen above resistance. Make sure to keep a very close monitoring eye on the momentum indicators like the RSI and MACD as this all develops. Any major shift in momentum should mean bianry options traders completely ditch the idea of reversals and opt for a wait and see strategy change.

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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