Binary options on CAC40 are vacillating on Monday. It is hard to find a direction. The downward pressure is still alive. However, it is summer and typically during that time of the year the binary indexes do not experience severe drops. The major part of the traders is on vacation and the trading activity is slowing. The volumes are light and it is possible to be manipulated.
Binary index is volatile recently. Typically it moves less than its peers. So, it is more suitable for the conservative binary trades. European debt and financial crisis are weighing on the behavior and on the mood of the binary market participants. It is very hard to be consistent when the market turbulence is so high. It is better to attempt capturing subsequent waves instead of placing long-term bets.
It is important to watch charts on multiple time frames in order to have better view of the price action. The binary traders could discern better the waves on the 4h charts. It is suitable to start with a longer chart and take the final decision on a shorter one. The length of each wave is possible to be determined using the Fibonacci numbers. In the current case, the wave from 3000 points to 3290 points has been retraced close to 161.8% mark or 3110 points.
Currently, the binary options are testing 3180 points. It represents 61.8% of retracement from the wave comprising the zone between 3200-3120 points. Potential downside targets are 3140 points, followed by 3110 points.
Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.
