Binary Options Trading Tips 23-28.7 – Stocks Markets Finish Lower after Bernanke Testimony
Binary Options Trading Recommendation for this week – Market Information and Trading Briefing
Stock markets finished the week trading lower after US Federal Reserve Chairman Ben Bernanke gave his latest testimony to Congress and gave no impression that the US central bank is looking to inject a third round of monetary stimulus in order to boost growth in the US economy. The negative sentiment was propelled further after the IMF downgraded GDP forecasts for several major economies (although it held it US forecast steady at 2% growth for the year).
Safe haven assets met some heavy selling pressure early on and into the middle of the week, but closed on Friday with a bid tone as investors are reluctant to make any long standing commitment to bull rallies. This latest move, however, could have a difficult time sustaining itself without fundamental drivers to support sentiment direction. Bullish reversals are still a possibility if we see new stories about major central banks shifting bias toward policy easing strategies, and if this is the case to any large extent, we can expect stock markets and high yielding currencies to push to new monthly highs.
Sideways Trading Possible with Lack of Macro Data
Looking ahead, to see what the fundamental driver could be, we must consider the macro data that is scheduled for release. Most of these numbers, however, are second-tier and not particularly market moving with European numbers seen with Eurozone PMI on Tuesday and German CPI on Friday. Since these numbers have only limited relevance next to the major market concerns at the moment, there might be more of a reaction to the Eurozone Consumer Confidence numbers early in the week, and also with the German IFO Business Climate and Current Assessment Surveys that will be released on Wednesday.
In the US, the main numbers will come with New and Pending Home Sales, Durable Goods Orders and then Gross Domestic Product on Friday. A good deal of market attention will center on the trading activity in the Euro, as the EUR/USD forex pair is trading near its lifetime historical average, which is now at 1.2135. With markets posting new lows for the year (and the EUR/JPY trading at its lowest levels in more than 10 years), trading behavior in the Euro is likely to get more attention as prices approach this range. Any significant moves in this area could be critical for determining directional bias in the coming months.
My Trading Recommendation in 50 Words
The GBP/USD showed a false break of critical resistance levels last week and follow through is expected to continue into the low 1.54s next week. With this I am looking to enter into a 1 week PUT option at current levels, the only thing that will negate this bias is a break back above 1.5750.