Binary Option Setups: Week of September 19th – 23rd

BinaryOptionsNow | Published on September 18, 2011 at 11:07 am

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binaryoptionsnow – Following the European central bankers meeting held in Poland at the end of last week, the EU seems to have reassured the markets a week after intense speculation over a possible Greek default. This week there are a series of economic releases scheduled which may provide an opportunity to invest in a forex binary option that finishes in-the-money.


Potential Binary Option Setups

Here are a few potential binary option setups for the week of September 19th-23rd:

1. German ZEW Economic Sentiment (Monthly) – Tuesday, September 20th 09:00 A.M. GMT – The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment survey determines the sentiment of German institutional investors based on the opinions of 350 German institutional investors and analysts.

The previous ZEW reading was released on August 23rd and came out much lower than the predicted number of -26.0 measuring in at -37.6. This week, the forecast is very pessimistic again for -44.1, indicating a worsening economic sentiment outlook.

A number above 0 indicates an overall optimistic outlook for the economy while a number below 0 indicates a more pessimistic outlook.

If the general sentiment is that the ZEW will come out far below the prediction of -26.0, it may be prudent to invest in a Put EUR/USD binary option with the idea that the euro will decrease in value vis-a-vis the US dollar.

If the feeling is that the ZEW reading will be much higher than -26.0, indicating a positive outlook for the EU economy, it may be prudent to invest in a Call EUR/USD binary option with the expectation that the euro will increase in value against the greenback.


2. US Existing Home Sales (Monthly) – Wednesday, September 21th 14:00 GMT – The Existing Home Sales is a monthly measurement of the change in the annualized number of existing residential buildings that were sold during the previous month. It is officially compiled by the National Association of Realtors. This release is a serious indicator of the strength of the American houing market.

The previous figure released on August 18th was 4.67M which was negative compared to the 4.90M expected by analysts. The forecast this month is for 4.75M.

A higher than expected reading should be taken as bullish for the US dollar and a lower than expected reading should be taken as bearish for the Greenback.


3. US Initial Jobless Data (Weekly) – Thursday, September 22th 12:30 GMT – The Initial Jobless Claims is a seasonally adjusted measure of the number of people who file for unemployment benefits during the given week. This information is weekly compiled by the Department of Labor.

The previous figure released on September 15th was 428K which was quite negative since the previous forecast was for 410K. The forecast this month is quite pessimistic since it is 420K.

A higher than anticipated reading should be considered as negative/bearish for the USD, while a lower than forecasted  reading should be taken as positive/bullish for the US currency.

An opportunity to profit from a EUR/USD forex binary option may present itself if the US Initial Jobless Data is much higher or lower than the predicted outcome.


4. Canadian Retail Sales & Core Retail  Sales Data (Monthly) – Thursday, September 22th 12:30 GMT – Statistics Canada will put out Retail Sales data for Canada that is expected to decrease by 0.3% versus last month’s 0.7% gain. Furthermore, the market is expecting the more significant Core Retail Sales number that excludes autos to gain by 0.2% compared with its previous 0.1% decrease.

Due to the volatility that the release of this key indicator can cause for the Canadian dollar, a forex binary options strategy of buying a strangle or straddle on CAD versus one of the other major currencies like the USD could be a limited risk way to profit if the Canadian Retail Sales data results in a significant move in the underlying currency pair.


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As always, keep in mind that the major financial assets are constantly being influenced by many other factors beyond the release of economic data and that previous results do not guarantee future outcomes.

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