The upcoming week will feature the release of important Q3 GDP data for several countries, including India, Canada, Brazil, Australia and Switzerland. Other important information includes monetary policy updates from the European Central Bank, the Bank of Canada, the RBA and the Bank of India. I have found that by tracking the consensus forecasts and measuring them against the actual figures, you can profit off the differences with binary options trading. These trading opportunities present themselves in the form of call or put options in currency pairs, indices, stocks and commodities. For the week ahead, these are my predictions vis-a-vis profitable trading opportunities.
1 – Currencies: Consider Call Options on AUD/USD Pair
AUD/USD Pair is Bearish but Forward Guidance may warrant Call Options on the AUD
The Australian dollar has come under increasing pressure of late as a result of China weakness. Leading into the final days of November, the AUD weakened substantially against the greenback. This has been the result of stresses on the commodity sector of the Australian economy, notably the mining sector. Persistent weakness in China has given rise to a significant decline in exports from Australia to China. This has impacted on the revenue streams and profitability of multinational corporations operating in Australia, and the AUD as well.
On Monday, 30 November 2015, the Reserve Bank of Australia will be making a decision regarding interest rates. The consensus forecast is 2%, and the previous forecast was 2%. In other words no changes are expected in interest rates, but it is the content of the statement released by the RBA that will be closely watched by currency traders. If forward guidance indicates that an interest-rate hike will be forthcoming, the AUD will rally and call options will be the order of the day. This is likely to happen irrespective of no changes being made to the current interest-rate. In much the same way as currency traders attempt to interpret the statements of the Fed FOMC for indications of future activity, so too will traders attempt to gain invaluable information regarding the future direction of the RBA.
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