Before we go to the technical analysis, let’s overview the market from a fundamental point of view:
We are witnessing a huge collapse since 26 years ago – trump effect in its full power,The dust didn’t sink to the ground yet, markets are still being trade as a react for Trump victory.
Before the election results in the US, the assumptions were that the market is going for a crash in case Trump wins, but the crash didn’t occurred on the stock market, it occurred on global bonds market, the bonds market for 10 years was cutting down by 4%.
It is a sign for a great fear that some of Trump promises will eventually come true, one of them is a damage in foreign trade relationship that US has with China, if this will come true the inflation will rise, it will force a major increase to interest rates and as a result to a decline (collapse) on all financial markets.
Ths USD currency is affected dramatically from the election result, it is noted the great increasing trend Vs JPY since the year of 1988, where it completes 10 days of increasing Vs. EUR, and now it’s slightly below a break even with the EUR.
The next interest rate decision will occur on 14th of December, less than one month from Today, in case of increasing the interest rate we might see the USD increasing above EUR price, meaning, in the chart we will see a decline for EURUSD, maybe below 1.0
It’s an interesting period of time to trade in the market, it brings lots of opportunities with its volatile patterns.
What does this all mean for a binary option trader, it means you need to be more on focus, don’t waste your money on binary option contracts that you are not sure of, stick to your strategies, stick to your money management sheets you prepared in advanced, don’t attempt to take a chance and open a trade just by your gut feeling, remember our number one rule i mention here again and again, you on’t need lots of trades every day, all you need is couple of good trades in one week to keep profits.
Here i want to give you a tip on how you should manage your money and the risk level as a result.
Money management rules:
a. Define the monthly percent increase you would like to have to your money, keep in mind the percent should be durable, such as 3% – 4%
b. Reaching goal – each and every month try to reach that goal, if you reached it stop all tradings for this month
c. Set risk amount for each trade that you can control of
d. Pationt, it takes time, but imagine you reach that goal for 2 – 3 years, calculate the growth of your money.
And now let’s move on to take a look on some technical analysis charts:
EURUSD, it looks like the market is getting prepared for an option the Fed will decide to increase the currency rate of USD.
the USD is getting stronger, therefor EURUSD chart is decreasing 10 days in a row, on the other hand while looking at the weekly chart the candle ends below bollinger 2.0, there might be a retrieve, i’d try to search signs in short term for call options (only if there is a clear sign)
EURUSD weekly with bollinger indicator:
GBPUSD didn’t experienc the same sharp decline but in case of increasing rate decision for USD the efect will be the same
GBPUSD daily chart
S&P, it looks like it’s moving forward to a new heights, but the indicators shows its weak points, i’d wait for a clear sign of decline before taking any actions.
That’s for this week, let me know your thoughts,
Have a great trading week.