AUD/USD Forex Binary Option Opportunity

BinaryOptionsNow | Published on July 27, 2011 at 10:23 am

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The release of the Australian Consumer Price Index (CPI) for the second quarter today at 2:30 A.M. GMT provided an excellent opportunity for an investment in a forex binary option on the AUD/USD currency pair.

Australia’s second-quarter CPI inflation hit 0.9%, compared to a rise of 1.6% in the previous quarter, sending the Australian dollar to a fresh high vis-a-vis its American counterpart. The CPI reading exceeded the 0.8% that economists had predicted.

As illustrated in the chart below, traders who anticipated that the CPI reading would come out higher than expected – and thus raise the value of the Australian currency against the US dollar – could have profited from an investment in a call AUD/USD binary option at or around the release of the report.

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As is clearly shown, a call on an AUD/USD binary option with an expiry of 15 minutes to one hour executed at 2:30 A.M. GMT would have finished in-the-money, netting up to an 85% payout.

The Consumer Price Index (CPI) measures the changes in the price of goods and services from the perspective of the consumer.

The CPI is the primary gauge of consumer prices in a country and tends to create hefty market impacts since consumer prices account for a majority of overall inflation and rising inflation typically leads the central bank to raise interest rates.

Remember, the financial markets are constantly being influenced by myriad factors so there is no guarantee that the Australian dollar will only respond to CPI data when they are released.

However, judging from past CPI data releases such as the one above, there may be an excellent opportunity to profit with binary options during the release of this economic data.

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