While the euro resumes its fall against the U.S. dollar, the pound sterling of Great Britain has begun to gain strength. Since February 26th, the GBP has been making strong moves against the USD, going from a price of 1.3873 to its current level of 1.4385. Analysts are noticing this, and many have even begun to revise their long term forecasts for the pound.
Much of this is because of the fact that the European Central Bank is making some extreme moves. And by extreme moves, this specifically means that they have announced that they are not planning on further cutting negative interest rates. The ECB has been viewed as radical because of this, simply because the European economy has been so unpredictable lately. The most recent announcement has hurt the euro quite a bit, but it has helped to stabilize European stocks. The short term effect here is that both the U.S. dollar and the GBP have gained strength.
The fact the British stocks are also impacted by the ECB’s move cannot be discounted. This move helps British stocks, and it helps the pound sterling, too. That puts the British economy is a unique spot, strengthening both stocks and currency. This is not likely to last for long, but while it is, taking advantage of it in your trades, either through binary options, Forex trading, or both, is a great way to increase your profit amounts.
This strength is the overall trend that you should be looking at when formulating binary options trades, but in a very specific context. While it is possible to make money trading against trends with ultra short term trades, it is not the best course of action thanks to the high-variance nature of binary options in general. When you go with the trend, the degree of randomness is decreased, and your odds of success go up dramatically. As long as you are researching technical indicators, you can put together a strategy with better chances of long term profits. Long term profits can only be achieved with consistent short term success, though, so do keep this in mind as you are looking at both macro and micro trends within a currency pair.
One alternative trading strategy that you should also be considering here is to look at the euro compared to the pound. If the pound is going up against the dollar, and if the dollar is going up against the euro, then it makes sense that the pound would rise even more strongly against the euro. Not all binary brokers offer this pair, but if they do, making the appropriate moves to take advantage of this will be an easy way to add additional winning trades to your portfolio and increase your profits. To drive this point home, on Friday, while the GBP/USD was up 0.71 percent, the GBP/EUR was up 0.85 percent. When something like this happens, your odds of success on the higher gaining pair will have the largest degree of success, granted that you are able to ride on the current motion of the market.
It could also be beneficial to look at other European currencies, specifically the Swiss franc. This relationship is not quite as strong as the euro/pound/dollar one is because it is not as widely traded, but thanks to the fact that the CHF is pretty stable historically, depending on what the technical say, this could be a pretty lucrative spot to be in. Again, not all binary brokers carry the CHF, but if they do, this is an opportunity that you will want to at least look at to get a feel for it.