One of the top things to look out for over the coming weeks in the world of Forex trading is the relationship between the British pound sterling and the euro. Those in positions of authority with the pound have stated that there is a strong potential for a currency “shock” to occur within the next week or so, and this could lead to a profound drop in the pound’s strength against major currencies. The euro is a prime candidate for which currency that shock will be felt hardest against, and as such, this is a pair that has had a lot of our attention devoted to recently.
At the time of writing this, the GBP had appeared to have run out of upside potential, and recent gains were unlikely to hold any more momentum moving forward. But with several news events lined up in the next couple weeks, it could be just a matter of time before these thoughts shift. Keep an eye on not just the news and the sentiment that it creates here, but also pay attention to the supporting technical indicators as these will have a profound impact on your entry point. If you trade short term binary options, this is a must if you want to improve your trade success rate and have a realistic chance of turning a good profit. Even with a pair of currencies that has a strong sense of direction, timing your entry points well is a crucial part of your success. It’s also helpful for high frequency traders as it refines your accuracy.
Keep in mind that for a huge drop in the GBP/EUR to occur, experts believe that there would need to be a breakout below the 1.1450 mark. If this were to occur, the pair could easily fall down as low as 1.1340. At this point, the pair is far from there, but these numbers could have a significant impact on your own personal trading. Both the Forex market and the binary options market—or even a combination of these two—could easily help you to boost your profitability off of this. These two markets give you an edge because we are looking at the equivalent of a short sale, and neither market charges extra in fees for this type of a trade.
With resistance likely to cap the GBP/EUR well below recent highs, the 1.1688 point that we saw not long ago appears to be ancient history. The pair is settled, for now, at about 1.1560, but there is more negative sentiment than positive. This is a tough spot for the pound to be, especially as England and its economy prepares for its transition to an independent economy. The pound’s movements against the euro isn’t anything out of the ordinary if you are just looking at raw numbers right now, but it does expose a deeper weakness. The loss of forward momentum is very concerning if you take into account the fact that the transition into a new economy has not even begun. The significant drops that were experienced a few months ago were purely reactionary, and that has been completely reversed since it occurred. Now, what we are seeing is pure consumer confidence, and for that to be shaken at this early stage is troubling. The events that are lined up in the future will likely play a role in the pound’s next moves, and they might even have a strong influence on what we’ve seen already, but they are worth paying attention to. If anything unexpected occurs, big profit making opportunities could arise in both the Forex and the binary options market.