Greece’s woes won’t leave the stock markets anytime soon and the fact that the current administration is providing panicky rhetoric isn’t helping. Papdemos said yesterday to CNBC that he is aware that countries surrounding Greece were planning scenarios for Greece’s departure from the Eurozone. Although this seems like an innocuous enough comment, the fact is that any rhetoric relating to Greece dumping the EUR causes a serious shakeup in the markets. Asian markets took the news the hardest as the Nikkei shed more than 1.85% early this morning and is now down to a low not seen since mid-January. The index looks ready to fall below support and binary traders would be wise to follow this index in the coming days. Later today, when the Nikkei is open for trading, we expect heavy volume on the index. GOptions.com, a binary options broker, reported earlier today that the index had the highest volume of any stock index for the last 72 hours. Normally, stock indices account for less than 10% of binary options volume but the fact that the index is nearing 2012 lows is causing traders to take a keen interest and push the index further down. The interesting aspect of this news is that Europe was actually up on the day yesterday as the DAX and FTSE finished much higher. This is much different than what was seen in the US as the Dow and Nasdaq finished lower on very volatile trading towards the end of the trading session.
The S&P stock index actually managed a very slight increase on the day, but the real news is the volatility in the market caused by the news from Greece. With no other significant economic data slated, all eyes were locked on the impending catastrophe. However, the fact is, this news will be around for many more weeks as the Greek’s prepare for elections to be held only on the 17th of June. So until then, binary traders would be wise to keep a pessimistic stance towards the markets. There is no real reason to believe that investors will change their viewpoint and become bullish all of a sudden and as such, we expect little in the way of major upward moves for the major stock indices. As we explained above, the Nikkei may actually continue to get pummeled as the Japanese central bank decided to make no changes to their monetary policy and left interest rates unchanged at a virtual zero level.
For forex binary options traders, the EUR/USD looks interesting today. As the news from Greece intensifies, the USD is gaining momentum. The currency pair is currently trading just above support at 1.2676 where support is currently at 1.2650. The pair tested the level yesterday but didn’t manage to break and as such, the level is back in the focus for today’s traders. Look for any break of this level to allow binary traders to take Down options.