December 8, 2014 7:45am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EURCHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2025
• Upside Potential: The upside potential for this binary call option is 20 pips to 1.2045
• Downside Potential: The downside potential for this binary call option is 10 pips to 1.2015
The EURCHF has been stuck in a very tight trading range as defined by its intra-day low of 1.2009 which was reached on November 19th 2014 and its intra-day high of 1.2046 which was reached on December 2nd 2014. This currency pair has been unable to move beyond this range, but a series of higher lows has created an ascending support level which is expected to apply upward pressure to the EURCHF in order to challenge its most recent intra-day high and potentially breakout above it.
Price action is currently trading just outside its horizontal support level. The ascending support level is merging with its horizontal support level and the EURCHF is expected to move to the upside as a result of the enforced support area. Binary options traders can profit from the expected move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2025 for a risk/reward ratio of 1.0/2.00.
Volatility has been relatively contained as the EURCHF has been confined to its tight trading range. Volatility may experience an increase as sellers are expected to take the current downward momentum away from its intra-day high in order to force a breakdown below its horizontal as well as ascending support level. Any potential breakout is unlikely to be limited to its intra-day low of 1.2009. Buyers are anticipated to take advantage of the merger between its ascending support level and its horizontal support level in order to attempt a move to the upside. This favors binary call options in the EURCHF currency pair.
Given the tight trading range there are no major support or resistance levels outside the intra-day high of 1.2046 which was reached on December 2nd 2014, forming the top of the trading range, and the intra-day low of 1.2009 which was reached on November 19th 2014 forming the bottom of the trading range. A minor resistance level awaits the expected move to the upside at its intra-day high of 1.2033 which was reached on November 25th 2014. This level has previously halted a drift to the upside.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURCHF currency pair:
German Industrial Production for the month of October:
• Expectations: A monthly increase of 0.4%, an annualized increase of 0.9%
• Previous Report’s Data: A monthly increase of 1.4% was reported in September, an annualized contraction of 0.1%
• Impact on the Euro: The expected increase in annualized industrial production out of Germany, the largest economy in the Eurozone, is likely to apply upward pressure on the Euro; this favors binary call options in the EURCHF currency pair
In addition the following economic report out of Switzerland is expected to impact the quote currency, the Swiss Franc, of the EURCHF currency pair:
Annualized Retail Sales for the month of October:
• Expectations: A monthly increase of 0.2% is expected for the month of October
• Previous Report’s Data: A monthly increase of 0.3% was reported in September
• Impact on the Swiss Franc: The anticipated slowdown in retail sales out of Switzerland is expected to pressure the Swiss Franc to the downside which favors binary call options in the EURCHF currency pair