December 1, 2014 5:54am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: AUDUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.8450
• Upside Potential: The upside potential for this binary call option is 345 pips to 0.8795
• Downside Potential: The downside potential for this binary call option is 150 pips to 0.8300
The AUDUSD has reversed its recent gains as renewed weakness in the commodity sector has punished the Australian Dollar. This has reversed the recent drift higher which was halted at its descending resistance level and limited the upward drift to an intra-day high of 0.8615 reached on November 27th 2014. The overall downtrend in the AUDUSD emerged from an intra-day high of 0.8795 which was reached on November 17th 2014 until it recorded an intra-day low of 0.8417 today on December 1st 2014 amid a capitulation sell-off as commodity prices plunged to multi-year lows.
Price action is now trading below its horizontal support level as this currency pair experienced a breakdown due to the drop in commodity prices. The AUDUSD is expected drift higher and back inside its horizontal support level in order to successfully breakout and move to the upside. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.8450 for a risk/reward ratio of 1.0/2.30.
The AUDUSD has experienced a low volatility trading environment inside its merged support area, the ascending support level has combined with its horizontal support level, but a spike in volatility occurred during the breakdown. Sellers may attempt to strengthen the breakdown and extend it further away from the double support area which is unlikely to be sustained. Buyers are favored to take the oversold condition and close proximity to a strong support area as a solid platform in order to launch a breakout above its descending resistance level and challenge its intra-day high of 0.8795 which was reached on November 17th 2014
The first resistance level, after a successful breakout above its horizontal support level as well as descending resistance level, awaits the AUDUSD at its intra-day high of 0.8615 which was reached on November 27th 2014. This level halted the previous drift higher. The next resistance level is located at its intra-day high of 0.8722 which was reached on November 21st 2014, another level which halted a previous advance and reversed price action lower. The final resistance level is located at its intra-day high of 0.8795 which was reached on November 17th 2014 from where a double top formation may form.
The following economic data out of Australia already impacted the base currency, the Australian Dollar, of the AUDUSD currency pair:
AiG Performance of Manufacturing Index for the month of November:
• Expectations: A monthly reading of 50.0 was expected for November
• Previous Report’s Data: A monthly reading of 49.4 was reported in October
• Released Data: A monthly reading of 50.1 was reported for November
• Impact on the Australian Dollar: The improvement in the Australian manufacturing sector is expected to pushed the Australian Dollar higher which favors binary call options in the AUDUSD currency pair
In addition the following economic report out of the United States is expected to impact the quote currency, the US Dollar, of the AUDUSD currency pair:
Institute of Supply Management Manufacturing Index for the month of November:
• Expectations: A reading of 58.0 is expected for the month of November
• Previous Report’s Data: A reading of 59.0 was reported in October
• Impact on the US Dollar: The expected slowdown in the ISM Manufacturing Index is expected to pressure the US Dollar to the downside; this favors binary call options in the AUDUSD currency pair