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By: Adam Stone
October 6th 2014 5:40am GMT, London UK

Today’s Binary Options Trading Strategy:

• Currency Pair: EURCAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.4090
• Upside Potential: The upside potential for this binary call option is 240 pips to 1.4330
• Downside Potential: The downside potential for this binary call option is 90 pips to 1.4000

The EURCAD has experienced a prolonged move lower which created three lower highs and a descending resistance line which has exercised downward pressure on this currency pair. The current move lower was initiated after the EURCAD reached an intra-day high of 1.4387 on September 15th 2014 to an intra-day low of 1.4011 which it reached on October 2nd 2014. This intra-day low also formed a double bottom formation which is a bullish chart pattern.

Bianry options trading with EURCAD 2014-10-6

Price action did bounce off of the double bottom formation which led to a false breakout above the descending resistance level before retreating back below it. Momentum is expected to force another breakout which could take the EURCAD back into resistance. Binary options traders can benefit from the pending breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.4090 for a risk/reward ratio of 1.0/2.67.

Volatility is expected to spike as buyers and sellers will face off at a crucial support level. Buyers will likely attempt a second breakout above the descending resistance level and a close above it should provide further upside potential. Sellers are expected to force the EURCAD lower, but any move to the downside will be limited given the potential for a triple bottom formation and therefore any downward move from current level should be taken as a better entry opportunity for binary call options in the EURCAD.

The first resistance level after a successful breakout above the descending resistance level is located at the 1.4247 level which is an intra-day high reached on September 24th 2014 and was able to previously reverse a move higher. A breakout above this level will take the EURCAD back into its intra-day high of 1.4387 which it reached on September 15th 2014 where a double top formation may emerge.

The following economic data out of the Eurozone is expected to impact the the base currency, the Euro, of the EURCAD currency pair:

German Factory Orders for the month of August:

• Expectations: A monthly contraction of 2.5%, an annualized increase of 2.6%
• Previous Report’s Data: A monthly increase of 4.6% was reported in July, an annualized increase of 4.9%
• Impact on the Euro: The expected continuation in annualized German factory expansion should exercise upward pressure in the Euro which favors binary call options in the EURCAD currency pair

In addition the following economic report out of Canada is expected to impact the quote currency, the Canadian Dollar, of the GBPCAD currency pair:

Ivey Purchasing Managers Index for the month of September:

• Expectations: A reading of 52.5 is expected for the month of September
• Previous Report’s Data: A reading of 50.9 was reported for the month of August
• Impact on the Canadian Dollar: Expectations for the Canadian Ivey PMI are very optimistic which leaves the Canadian Dollar vulnerable for disappointment; this favors binary call options in the EURCAD currency pair

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
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