Goldman Sachs, the most respected and feared investment bank on the planet, just released a surprising forecast on the Forex market. The Forex strategists of the investment bank just made a downward revision to their EURUSD estimates to 1.14, 1.11 and 1.08 with 3, 6 and 12 months respectively (from 1.23, 1.20 and 1.15 before). But the surprise comes from the long term forecast of the Goldman Forex team; they indeed bring their end-2016 forecast to 1.00 (from 1.05) and that for end-2017 to 0.90 (from 1.00). You did read it well, Goldman Sachs forecast a Euro-Dollar exchange rate below parity for end-2017.
Goldman forecasts a weakening European economic momentum
This is quite something when you consider that the Euro-Dollar exchange rate last broke the parity level back in 2003, which is 11 years ago. Goldman believes that a growth and competitiveness crisis is likely to continue in Europe, further weakening the Union currency. According to historical figures on emerging markets, Goldman Sachs demonstrated that these countries saw real devaluations of around 30% during the kind of balance of payments crises that the Euro periphery has also seen. At the same time, Goldman Sachs also reiterated its conviction on its previous dollar bullish call after the normalization of the Federal Reserve (Fed) monetary policy (considering that the Fed is taking a relatively benign view on the fall-out of Dollar strength for the economy).
How to use this news to build a binary option trading strategy?
Of course, this is a long term forecast and should not be used to build a binary option trading strategy. Nevertheless, this kind of statement from the most respected financial institution on Wall Street is likely to bring some volatility to the Forex Market. As you now know, volatility is the biggest incentive for binary options trading activity. It is really easy to make money with binary options in volatile markets. This forecast is also likely to materialize in the form of a downtrend that you can use to build trend line trading strategies with binary options.
Forex is the most popular market for binary option traders. All the recommended brokers of the website offer all types of binary options on EURUSD with a large range of maturity. Don’t hesitate to have a look at our detailed review of OptionTime, 24Option, AnyOption and TopOption to have more information about their specific offers.