British pound trading in a range
For those looking to trade binary options on the GBP/USD forex pair, there are a few factors to consider this Wednesday. The first and most important is that the pair is currently trading in a range and until it decisively breaks out of it there is a likelihood that no material direction in the pair can be found.
If we have to predict where the GBP/USD is going next we need to analyze the current situation in detail. As the pair is flirting with the upper side of the range currently, trading around 1.5270, we would be keenly awaiting the next clue for action.
The main risk to the outlook for the British pound is the Bank of England's Quarterly Inflation Report tomorrow. In order for us to see a move higher in the GBP/USD pair, that is going to have to mention some course of action involving future interest rate hikes.
Today we aren't seeing that, primarily due to the risks which are weighing from the European risk event - the Eurogroup meeting which will be deciding on the faith of Greece. As neither side wants to make any concessions, the negotiations are likely to be quite tough.
The moral hazard of softening the bailout conditions for Greece is keeping the European finance ministers discussions very important, and any rally in the euro in the aftermath of a prospective deal, could be short lived depending on the outcome of today's meeting.
Back to the GBP/USD risk factors could push prices above 1.5280 which will open the way up towards 1.5300 and beyond. If we see an hourly close above the 1.5280 area, we would be buying those daily calls looking for a retest of last week's highs above 1.5300.
On the other hand, if the pair fails again on the upside, the 1.5100 area is going to get exposed. In case of two consecutive attempts at 1.5280 which end up in failure, we would be buying daily puts on the GBP/USD for a move towards the lower side of the range, currently at 1.5200.