Binary Option Setup of the Day: August 3rd

BinaryOptionsNow | Published on August 2, 2011 at 1:40 pm

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The world breathed a sigh of relief on Tuesday as the US House of Representatives approved a proposal to raise the legal US debt ceiling and rein in US national spending. The bill is scheduled to be voted on by the US Senate today at 4:00 P.M. GMT.

The recent US debt ceiling debate has underlined that the dollar still rules forex exchange trading all over the world.

The daily Binary Option Setup will focus on the USD and relates to a US economic reading set to be released tomorrow, Wednesday, August 3rd at 12:15 GMT: the US ADP National Employment Report.

US ADP National Employment Report for July 

The ADP National Employment Report is released by the Bureau of Labor Statistics and measures the monthly change of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 400,000 US business clients.

The previous ADP report number was released on July 7th and came out at 157K, which was quite positive since the previous forecast was for 60K. This month, according to Natixis, the forecast is 95K.


The ADP report, which is released two days before the government’s official report, is a good predictor of the government’s NonFarm Payrolls (NFP) data as can clearly be seen in the chart above.

The change in this indicator can be very volatile even if the results are predicted to some degree in advance. A string of consistently positive or negative nonfarm payroll reports will almost always impact the dollar’s value vis-a-vis other currencies.

For example, a streak of reports in positive territory – indicating that more jobs are being added to the economy – is viewed as an upward force on the value of the dollar. Conversely, a series of declines will indicate that the economy is weakening due to falling demand, which often results in a drop in the value of the dollar.

Binary Option Setup

An opportunity to profit from an EUR/USD forex binary option may present itself if the ADP National Employment Report is much higher or lower than the predicted outcome.

Should the reading be higher than expected, this could indicate that expectations for the USD are positive and the dollar may in turn be buoyed by these expectations and increase in value against the EU’s single currency. In this case, an investment in a put EUR/USD binary option at or around the release of the employment figures may finish in-the-money.

If, on the other hand, the ADP National Employment figures come out way below expectations, the USD may be negatively impacted by this data and lose ground against its EU counterpart. In that case, a call on an EUR/USD binary option investment made at or around the release of the data may finish in-the-money.

Remember, the financial markets are constantly being influenced by myriad factors so there is no guarantee that this strategy will always work in your favor. However, when used appropriately, a binary options investment may allow traders to profit from market fluctuations caused as a result of the release of sensitive economic information such as the ADP report.


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