Binary Options Strategy 2020

Today the Euro made an attempt at breaching the 1.38 level for the first time in the past 6 weeks.  The Euro came under pressure in late January and Early February of 2010, when it became evident that Greece would not be able to make its debt obligations based on its current fiscal situation.During the past 6 weeks the EUR/USD has consolidated and chopped around in a 2.5 big figure range.  With equity markets and riskier assets moving higher in the past 2 weeks, the Euro has again stabilized, and the situation in Greece has been moved to the back burner.

Yesterday, In Europe, Greece avoided a downgrade to its credit rating by Standard & Poor’s Ratings Services, which had warned last month that it was considering such a move, although the ratings firm did slap on a negative outlook.  S&P credit analyst Marko Mrsnik said the Greek government’s plans to reduce its deficit was supportive of the nation’s current triple-B-plus long-term credit rating, which is three notches into investment-grade territory.

Traders are now using the lull in news in the markets to push riskier assets higher and the Euro will probably make a number of attempts to the upside.  There are two ways to play this market using the binary options markets.

The first way is to use the binary market to buy a above or range options which speculate that the market will move into a higher range (or above the break out level), the next time the market attempts to break above the 1.38 level.

When looking at an hourly chart of the Euro, an investor can use an hourly above option to speculate that the market will break to new highs, the next time it passes 1.38.  The market will probably test this level multiple times, so there will be multiple opportunities for a binary options trader to take advantage of the potential trend to higher levels.  Another way this technical pattern can be traded is to use the binary option as a hedge.  In this case, an investor can purchase the underlying EUR/USD and purchase a below option, that is for a longer period of time, as protection against a quick failure in the upward movement of the EUR/USD.  A third way to use this type of pattern of consolidation is to use a coming economic data point that could be an impetus for higher prices.

The hourly charts combined with the daily charts allow traders to find potential opportunities to take advantage of patterns in the markets to trade the binary options market.  The consolidation pattern is one of the best breakout patterns and can be the most profitable for a binary options trader.