Playing The Australian Dollar With Binary Options: Is A Recuperation Under Way?

• Same as most major currencies around the globe, the Australian dollar has been depreciating versus the U.S. dollar over the past few years. After hitting its mid-2011 highs, the currency started to fall consistently.
• Between late-April 2011 and the end of 2015, the notes lost more than 32 percent of their value.
• Also notably, over the course of 2015, the Australian dollar tumbled almost 11 percent. However, since it hit it early September lows, it has managed to recuperate 3.9 percent of its value.

Although 2015 was not a very good year for the Australian dollar, which tumbled more than 14 percent over the first portion of the year, the currency has managed to recuperate 3.9 percent of its value since it hit its early September lows.

So, now, a few questions arise. First off, where will the Australian dollar go next? Will it continue to recuperate? Or, will it got back to its multi-year decline? Will the fall/recovery be constant or volatile? Finally, are there ways to benefit from the currency’s moves – other than acquiring the actual currency?

Related Link: How To Play Copper With Binary Options

Binary options provide an interesting alternative.

What Are Binary Options?

Trading via binary options is just that: Playing a binary event. “Binary options are limited risk contracts based on a simple yes/no market proposition like will the markets go up by the end of the trading week,” binary options trading site Nadex explained.

Trading Currency Pairs Via Binaries

A standard Forex Binary Option contract may look like the following: AUD/USD (Mon) < 0.70 (2PM)

In this example, the AUD/USD rate is 0.7289.

For traders thinking the AUD/USD rate will not continue to recuperate, and will instead fall below 0.70 by 2 p.m. Monday, buying this Binary Option could be the way to go.

For those thinking the AUD /USD rate will stand above 0.70 by 2 p.m. Monday, selling these contracts would make more sense.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.