The results of Germany’s ZEW Economic Sentiment report were released earlier today. They demonstrated that investor confidence within the country has declined over the past month. The figure, which is derived by surveying a cross-section of German investors and analysts on a monthly basis, was announced today, it came in at 36.3, which is both lower than the previous month’s figure of 48.5 and the expected figure of 41.5. Binary traders following the “if it comes in lower the currency goes down” rule may have been surprised to find all of their Euro Put trades expiring out-of-the-money today. The trading day got off to a somewhat shaky start with Euro stocks declining across the board for their third day in a row. This, no-doubt, in anticipation of a negative ZEW report, which was today’s most important and tradable economic data release. What may have astounded some binary traders today was that as the report’s results came in at 10:00pm GMT +1, the euro rallied against most of its major currency pairs.
EUR/USD was trading at 1.30282 as the figures came in, within ten minutes it had reached 1.30575 and continued to rise, going on to reach several peaks: the first 1.30897 at 10:36am, the second 1.31124 at 10:41am and the daily high at the time of writing was 1.31237 at 12:21pm.
It was much the same story for the EUR/GBP currency pair. It was trading at 0.85267 at 10:00am, peaked at 0.85468 by 10:33am, ranged for the best part of an hour and then went on to climb to 0.85748 by 12:19pm.
And again the same goes for EUR/JPY. The pair was trading at 1.27201 at 10:00am, it had reached 1.28251 by 10:45 and then went on to 1.28510 just after 01:00pm GMT+1.
This bullish action was perfect for traders of binary options who were able to repeatedly profit at different time scales thanks to the overwhelming trend being so positive. Those who quickly caught on that there were more at play than just the negative ZEW report quickly reversed their positions and continued for the next couple of hours. The euro bulls clearly had their confidence bolstered by a Euro CPI report coming in as expected and the core figures being better than expected. This in combination with less than impressive reports from the U.K as well as mounting worries over the U.S’s general state of economic health, helped push the euro beyond that 1.30 mark. Though many are now speculating that these values are entirely divorced from the European reality on the ground and are concerned that if price action begins to more closely mirror the economic truth of the European reality a drastic reversal may be imminent.
