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DOLLAR READY TO BUST LOOSE?

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X
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By: Adam Stone
June 12th 2014 6:05am GMT, London UK
 
As we look on, from the outside looking in, the forex market is really heating up for binary options traders as well as other investors seeking to take advantage of the dollar’s recent romp. The fact is, after the NFP (non-farm payroll report), the USD has been steadily gaining momentum despite initially losing ground to such currencies as the EUR and GBP. Looking at the daily charts now, the forex pairs looks ready to let the USD take over. The USD made a nice push higher against the EUR again yesterday and is now trading near 1.3543 which is just above the support level at 1.3522. The next support level below this is at 1.3505.

For binary options traders today, these levels will be of great importance. With the USD showing strength, it’s very likely that another push will be seen again today and we expect a break-out pattern to emerge on the 15 and 30 minute charts fairly early in the European session. Look for the EUR/USD to make an early and quick push past the initial support level and move lower. The breaks we can expect here might be a bit slow to develop but we are very confident that at the bare minimum, a test of these levels will be seen very early. As such, binary options traders opting for reversals may actually prefer taking these levels as pivot points for reversal trades and taking up options on each touch or test of the support. This looks to be a fairly safe means of strategizing for the day ahead, at least until the break is seen.

EURUSD with binary options 12-6-2014

More conservative traders will of course do away with such adventures in high frequency trading. After all, reversal strategies can create an incredible number of signals and as such, requires an inordinate amount of focus and more importantly, time. On the other hand, what do you have better to do while waiting for the break to occur? Well, maybe you’re busy but if you are already watching the markets, may as well take a few trades to secure profits on each test.

The trick to using effective reversal strategies is to actually give up on the tests of levels too far away from the actual support or resistance. In this case, an move 3-4 pips above the support will be deemed “too far”. Again, the issue of focus and preparation are key here. By knowing and planning precisely what needs to be done for each forex pair, you come in with a much higher probability of success when trading and that is all we hope for you to achieve in the trading day ahead.

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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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