December 24th, 2014 4:15am 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 0.8115
• Upside Potential: The upside potential for this binary call option is 435 pips to 0.8550
• Downside Potential: The downside potential for this binary call option is 215 pips to 0.7900
The AUDUSD was exposed to a new round of downward pressure which has pushed this currency pair below the 0.8100 level. The current level of its corrective phase took the AUDUSD from its intra-day high of 0.8615 which it reached on November 27th 2014 to its intra-day low of 0.8088 which it reached yesterday on December 23rd 2014. The sharp move lower took the AUDUSD into its next horizontal support level and additionally formed a falling wedge formation which is a bullish chart pattern indicative of a potential reversal in the AUDUSD.
Price action is currently trading inside its horizontal support level as the falling wedge becomes narrower. The AUDUSD is anticipated to breakout above its current chart pattern and accelerate to the upside. Binary options traders can benefit from the expected breakout and subsequent move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.8115 for a risk/reward ratio of 1.0/2.02.
Volatility has decreased as the AUDUSD was forming its falling wedge formation and traded down inside of it. This currency pair now trades inside it horizontal support level with a narrow falling wedge increasing pressure for either a breakdown below it or a breakout above it. Sellers may attempt to use the existing downward pressure to attempt a breakdown and extend the corrective phase. Buyers are likely to use the bullish chart formation together with its horizontal support level as a solid platform for a full price action reversal. This favors binary call options in the AUDUSD currency pair.
The first resistance level awaits the AUDUSD at its intra-day low of 0.8224 which was reached on December 9th 2014. This level has previously halted the move lower and pushed the AUDUSD back into its descending resistance level. A breakout above this level will take the AUDUSD to its intra-day high of 0.8376 which was recorded on December 11th 2014. The next resistance level is located at its intra-day low of 0.8417 which was reached on December 1st 2014 while the final resistance level is set at its intra-day high of 0.8615 which was reached on November 27th 2014.
The following economic data out of Australia already impacted the base currency, the Australian Dollar, of the AUDUSD currency pair:
Conference Board Leading Index for the month of October:
• Expectations: A contraction of 0.4% was expected for the month of October
• Previous Report’s Data: A contraction of 0.3% was reported for the month of September
• Released Data: An contraction of 0.2% was reported for the month of October
• Impact on the Australian Dollar: The improvement in the Conference Board Leading Index was reason enough for the Australian Dollar to move away from depressed levels 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:
Initial Jobless and Continuing Claims for the week of December 20th & December 13th 2014:
• Expectations: Initial jobless claims at 290,000, continuing claims at 2,375,000
• Previous Report’s Data: Initial jobless claims at 289,000, continuing claims at 2,373,000
• Impact on the US Dollar: The expected uptick in both initial jobless claims and continuing claims may suffice to exercise downward pressure on the US Dollar; this favors binary call options in the AUDUSD currency pair