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By: Adam Stone
February 10th 2014 10:30am GMT, London UK

This past Friday saw the release of the NFP report to much fanfare but incredible disappointment ensued. The EUR took the news and ran with it as the paid (EUR/USD) shot higher and up over resistance at 1.3615. The pair eventually topped at 1.3643, only to retreat back to mid-week levels near 1.36 only to crawl back up as the trading day closed up. Things opened this week in the same vain as the EUR continued its slow stroll higher but seems capped at the moment. The negative sentiment striking the dollar is certainly a direct result of the slower pace of jobs growth seen in the NFP. The fact that the US economy is unable to retain this pace is leading many economists to predict a lower than 2.5% quarter on quarter growth in GDP.

This is extremely significant and binary options traders need to pay heed. A slower than expected growth forecast will lead to a yet weaker USD and as such, binary options traders need to maintain focus expressly on this possibility. The ability of the EUR/USD, although seemingly capped at its current rate of 1.3635, won’t remain under wraps for long.

The pair already tested 1.3550 earlier today, to no avail. However, binary options traders can already set this level as a negative pivot level for reversal strategies later today. Any test of the level will allow binary options traders to take Down options on each test. If and when the level breaks and the pair heads up and beyond the 1.3650 level, be ready to ditch the whole reversal strategy and opt for break based strategies with longer term, and larger, trades. As breaks happen less frequently but provide follow through and as such, the likelihood of an immediate retreat is minimized. Binary options traders should seek those follow-through trades as they minimize risk, as mentioned already, but also maximize reward by virtue of the fact that it is thoroughly recommended to go with larger trades during such situations. With a bigger trade come bigger profits and with a lower risk scenario, this must be taken advantage of.

The NFP had other effects as well and some not as negative. In fact, the US stock markets altogether ignored the less than positive result. The S&P actually soared over 1.33% for the day and this was reciprocated by the other US indices like the Dow Jones which climbed over 1.06% to 15794. Although these indices are still below the record levels set just about a month ago, things are looking positive. Index binary options traders may wish to keep an eye on such scenarios with a positive outlook. If the Dow, for example, blasts past 16000, an unlikely scenario today, then binary traders can certainly take UP options with minimal risk. Look for such trades in the day ahead on indices, forex pairs, and commodities while leaving individual stocks out of the mix for the time being. Reason being, volatility on individual stocks is still exceedingly high and can thus lead to unwanted and unnecessary loss.

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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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