As pretty much every trader and investor in the United States has been wondering whether or not the Federal Reserve will raise interest rates this year, taking a look at what it would actually take for that to happen is going to be an important part of your ability to formulate successful binary options trades. According to Chairperson Janet Yellen, there are several factors currently weighing on the decision. One is the employment situation in the United States. Hiring has slowed down in a major way over the last few months, and until there is more stability here, the Fed will be cautious. A declining workforce would inevitably hurt the economy, and this is the current direction that the market is seeing. Unfortunately, until this changes, there will be a lot of uncertainty in the economy, and not just with what the Fed is going to decide.
Another big factor is what is going on in England. The “Brexit,” as it’s being referred to, will create instability all throughout Europe, and the rest of the world, undoubtedly. If this occurs, there will be fallout, and the U.S. economy will suffer as a result. A strong dollar and a strong domestic economy will both be needed for the U.S. to stay economically healthy. This will be voted on June 23rd, so be sure to follow what happens in Europe and England particularly as you figure out trades, both long and short term. The immediate repercussions will be most immediately felt in the GBP/USD and the EUR/USD currency pairs. And although these are very popular assets within binary options brokers, you can also profitably trade these through a Forex broker, if this is something that you believe would help you to create even more of a profit in your daily trading routine.
Of course, other worldwide events need to be monitored, too. Major terrorism attacks, wars, or any other sort of surprise event could influence the Fed’s future decision. No one wants any of these things to happen, but having a contingency plan in place in the very rare event that something does occur is just smart business. You wouldn’t trade without knowing the facts behind a trade, so you shouldn’t keep trading unless you are prepared for the circumstances that other people are not able to anticipate. This preparedness will give you a huge edge over other traders, so it’s worth spending time thinking ahead.
Even with all of the negative aspects that are weighing on the Fed’s decision, Yellen seems to be quite optimistic that the economy is nowhere near heading for a recession. And that means that the general trend of U.S. stocks and indices should remain headed upward for the long term. Again, having this in mind as you put together your trades is a must. The majority of binary options trades that you make should follow the overall trend, and when this is still upward, then call options for the major indices should remain the dominant choice. Not every trade should be like this, but the majority of them should be. Use your discernment with each and every trade that you make, of course, and be sure to rely heavily on a mixture of technical analysis as well as this generalized fundamental rule.
What we’re seeing here isn’t a reversal of Fed policy, but rather a response to a loss of momentum within the markets. The previously anticipated June rate hike isn’t going to happen because the key metrics have begun to change rather than continue on as expected. So when these things recover, then we should expect the rate hike as we once did.