June 4th, 2015 5:08 GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.1250
• Upside Potential: The upside potential for this binary call option is 215 pips to 1.1465
• Downside Potential: The downside potential for this binary call option is 130 pips to 1.1120
The EUR/USD has turned its downside momentum around with a breakout above its horizontal resistance level which has now become a solid horizontal support level. This move followed the reversal of a false breakdown; the result of a move to the downside which took this currency pair from its intra-day high of 1.1467 reached on May 15th 2015 to its intra-day low of 1.0819 recorded on May 27th 2015. An ascending support level emerged from this intra-day low and the move to the upside was strong enough for a breakout; many binary option traders profited as they added call options to their options trading accounts.
Price action is now trading between its horizontal support level and its descending resistance level. The EUR/USD is anticipated to possess enough momentum for a breakout in order to resume its move to the upside. Binary options traders can benefit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.1250 for a risk/reward ratio of 1.0/1.65.
The EUR/USD initially saw volatility contract as it corrected away from its horizontal resistance level, but an increase in volatility occurred after price action broke down below its horizontal support level and turned it into resistance. Volatility increased further as this move was reversed and the EUR/USD broke out above it. Binary option traders who wish to add this currency pair to their options trading accounts should be prepared for more volatility as sellers are anticipated to apply downward pressure on the EUR/USD. Buyers are favored to force a breakout above its descending resistance level which will clear the path for more upside.
The first resistance level awaits the EUR/USD at its intra-day high of 1.1324 which was recorded on May 15th 2015. This level marks the low of a previous reversal off of the bottom of its horizontal resistance level. A breakout above this level will take the EUR/USD to its intra-day high of 1.1392 reached on May 7th 2015 which represents the high of a past reversal. The final resistance level is located at its intra-day high of 1.1467 which was recorded on May 15th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/USD currency pair:
Eurozone Markit Retail Purchasing Managers Index for the month of May:
• Expectations: A level of 50.1 is expected for the month of May
• Previous Report’s Data: A level of 49.5 was reported in the month of April
• Impact on the Euro: The anticipated increase in the Eurozone Markit Retail PMI is likely to apply upward pressure on the Euro; this favors binary call options in the EUR/USD 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 EUR/USD currency pair:
Final Non-Farm Productivity & Unit Labor Costs for the first-quarter of 2015:
• Expectations: A contraction of 3.0% in non-farm productivity is expected in the final reading for the first-quarter of 2015, an increase of 6.1% in unit labor costs
• Previous Report’s Data: A contraction of 1.9% in non-farm productivity was initially reported for the first-quarter of 2015, an increase of 5.0% in unit labor costs
• Impact on the US Dollar: The expected contraction in non-farm productivity is likely to pressure the US Dollar to the downside which favors binary call options in the EUR/USD currency pair