Weekly Binary Options Trading Opportunities - Monday, Jan. 9
Trading Opportunity #1 – Goldman Sachs Group is Bullish
Goldman Sachs (GS) is an interesting stock to watch. For starters, there is significant optimism in the banking and financial sector. The prospect of deregulation is enticing to Wall Street banks and it will certainly bring big earnings potential with it. Less regulatory constraints will allow for a streamlining of operations and greater earnings potential. The CEO of Goldman Sachs group Inc., Lloyd Blankfein is confident that under Donald Trump, the banking sector will flourish.
Bank profitability will be increased by higher interest rates, lower corporate taxes, and massive fiscal stimulus. Remember that it is the banks that will be providing the funding for the fiscal stimulus, and it is the banks that will be issuing loans before higher interest rates kick in. The above chart displays the meteoric rise of Goldman Sachs stock since November 8, 2016. While the gains have been muted since December, this can be perceived as the calm before the storm. Interest rates are going to rise and bank stocks are going to flourish.
Trading Opportunity #2 – AUD/USD Currency Pair turns Bearish
The greenback recovered to reverse recent gains by the AUD. The above chart indicates the inherent weakness of the AUD/USD currency pair. A series of consistent declines in the performance of the AUD/USD pair has dragged it well beneath the 50-day moving average of 0.742 and the 200-day moving average of 0.750. They current exchange rate is 0.729. Simply put, currency traders going long on AUD are losing money. The greenback has enjoyed a bull run with a strong jobs report. This has lowered expectations for the AUD/USD pair. But don’t be mistaken by the overall trend – the AUD is one of the better performers against the greenback.
US nonfarm payrolls data added 156,000 new jobs during December, beneath expectations of 175,000 new jobs. This helped to weaken the USD and propel the AUD/USD pair. But it was the average hourly earnings increase of 0.4% in December that helped to mitigate losses on the nonfarm payrolls figures. The US dollar index is a terrific indicator of overall sentiment for the greenback. It is firmly bullish, and trading near 1-year highs. As a binary options trader, you will want to watch this pair closely because volatility makes it tough to gauge movements correctly. There is resistance at 0.7363 and at 0.7324. Watch these levels because a break to the upside could indicate a move towards call options on the AUD/USD pair.
Trading Opportunity #3 – the FTSE 100 Index Poised for Gains
Traders have called it the stairway to heaven – the uninterrupted ascent towards 7,211.96. Indeed, the FTSE 100 index is trading well above its 50-day moving average of 6,911.24 and its 200-day moving average of 6,631.54. But why is the all-share UK index rallying when Britain is preparing for a Brexit? The answer it seems is the GBP. The GBP/USD pair is currently trading at 1.2288, down 1.0470% or $0.0158. This is perilously close to the 52-week low of the GBP/USD at 1.21. As the sterling weakens, so the FTSE 100 index rallies. We know that the dollar is riding a wave of bullish sentiment.
The DXY (Dollar Index) is at record levels, and the US economy is preparing for a massive fiscal stimulus. Any additional rate hikes will only strengthen the USD further. Currency traders agree that a weak GBP is driving up the FTSE 100 index. Unfortunately, it appears to be overbought, and we can expect a pullback soon. Compared to the S&P 500 index, the rally on the FTSE 100 is strong. Fortunately, you can take heart from the strength of mining stocks and energy stocks like oil and natural gas. If the pound drops further, the FTSE 100 index will continue its upward movement. As a binary options trader, your best bet is to watch oil, gas, and mining stocks. If they rise, the FTSE 100 index will benefit.
Trading Opportunity #4 – Oil Holding Steady
The price of WTI crude oil has been hovering in a tight range between $52 per barrel and $56 per barrel. OPEC and non-OPEC exporters are in the process of cutting production, and this should effectively increase the price of crude oil. Unfortunately for crude oil, it is a dollar-denominated commodity. This means that demand for crude oil will decrease as the USD appreciates. The dollar index is trading at a 14-year high, and this is putting pressure on the oil price. The market will be subject to additional bearish pressure owing to a strong USD and conflicts within OPEC.
Analysts are now issuing upbeat predictions for WTI crude oil from $47-$55 per barrel to $55 – $61 per barrel in 2017. For now, dollar strength will keep prices depressed with only marginal gains possible. As a binary options trader, look for things like oil inventory reports, rigs in or out of commission and statements by leading OPEC countries like Saudi Arabia. It is a volatile market which is highly responsive to speculator sentiment.
Thanks and Merry Christmas