Weekly Binary Options Setups (April 4th – April 8th)

BinaryOptionsNow | Published on April 5, 2011 at 2:03 pm

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NEW YORK (Binary Options Now) – The U.S. Dollar turned in a mixed performance against the other major currencies on Monday. The lack of direction was largely due to most forex traders being on the sidelines before major market moving rate decisions by the world’s largest central banks.

The Greenback gained somewhat versus the Euro, with only the EZ Sentix Investor Confidence survey and EZ PPI released on Monday. Sterling was firm after a positive UK Construction PMI number, while the Canadian Dollar rose significantly before reversing direction.

The Aussie made a new post float high at 1.0416 before declining ahead of the RBA’s rate decision, which left rates unchanged at 4.75% for the fifth straight month. The Kiwi ended the session unchanged, while the Swiss Franc gained marginally against the Greenback.

Binary Option Setups For Upcoming Major Market Events

Several key fundamental economic data releases, which will be reported in the binary options news later this week will probably give traders interested in forex binary options trading considerable opportunities for profitable transactions.

These economic releases, which may well affect the forex market considerably include:

1. ECB Rate Decision

The European Central Bank will release its Minimum Bid Rate decision on Thursday. The rate decision is generally already priced into the market, as evidenced in the recent rise in EURUSD.

The benchmark rate is widely expected to be raised to1.25% from 1.00%, therefore, any deviation from this event — that is already priced into the EURUSD rate — will almost certainly increase volatility.

The press conference immediately following the release and what statements are made in the wake of the decision tend to carry more weight as far as market direction for EURUSD.

The rate decision and the subsequent press conference can offer the binary options trader good opportunities for profitable transactions on both the upside and the downside. A purchase of a forex binary options strangle or straddle on EURUSD, EURGBP, EURCHF or EURJPY may provide substantial ways to take advantage of the inherent volatility upon the release of this key economic number.

The binary EUR call option leg of this binary options strategy may profit if the ECB gives indications in its press conference that the rate hike is the first in a series of hikes, as it has done in the past. Conversely, the binary EUR put option may benefit if rates are kept on hold or the ECB indicates that the rate hike is not likely to be repeated in the near future.

2. FOMC Meeting Minutes

The Federal Reserve Bank will release the minutes of its most recent Federal Open Market Committee Meeting on Tuesday. The minutes often provide insights into the financial and economic conditions influencing the committee’s vote regarding monetary policy.

More hawkish comments than expected can benefit the U.S. Dollar, so a forex binary options strategy of buying a USD call against the other major currencies could be a way to profit if the FOMC Meeting Minutes could indicate future Fed rate rises.

3. Bank of Japan Rate Decision

The Bank of Japan will tentatively release its latest Rate Decision on Thursday in which the central bank is widely expected to leave its benchmark Overnight Call Rate unchanged at <0.1%. Accompanying the Decision will be a Monetary Policy Statement and associated BOJ Press Conference.

More hawkish comments than expected or a rate rise can benefit the Yen, so a forex binary options strategy of buying a JPY call/USD put could be a way to profit if the Rate Decision or accompanying comments could signal future possible BOJ rate hikes.

4. Bank of England Rate Decision

The Bank of England is scheduled to release its latest Rate Decision on Thursday in which the central bank is widely expected to leave its benchmark Official Bank Rate unchanged at 0.50% and its Asset Purchase Facility at £200B. Tentatively accompanying the Rate Decision may be a MPC Rate Statement, released if rates change.

An official rate rise by the BOE can boost Sterling, so a forex binary options strategy of buying a GBP call/USD put might be beneficial if the Rate Decision signals the possibility of additional BOE rate rises.

5. Canadian Employment Report

Statistics Canada will release its monthly Employment Report on Friday that measures changes in the number of employed people during the month. The result is expected to rise by 29.6K versus its previous 15.1K result. In addition, the Canadian Unemployment Rate is expected to drop to 7.7% from the 7.8% outcome seen the previous month.

An increase in unemployment will tend to weaken the Canadian Dollar, so buying a binary USD call/CAD put option can be a profitable forex binary options strategy if the Canadian employment data comes out significantly worse than the consensus expectations.

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