November 5th 2014 5:35am GMT, London UKToday’s Binary Options Trading Strategy:
Today’s Binary Options Trading Strategy:
• Currency Pair: EURGBP
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.7850
• Upside Potential: The upside potential for this binary call option is 195 pips to 0.8045
• Downside Potential: The downside potential for this binary call option is 50 pips to 0.7795
The EURGBP has endured an extended move lower amid economic data out of the Eurozone which has pressured this currency pair from its intra-day high of 0.8046 reached on October 15th 2014 to its most-recent intra-day low of 0.7799 reached in October 3rd 2014. The EURGBP found support at this intra-day low and managed to drift higher despite more depressing economic data out of the Eurozone. This currency pair is now approaching its descending resistance level.
Price action has drifted from its intra-day low to its steep descending resistance level, but the EURGBP is expected to have enough upward momentum to complete a breakout above its descending resistance level. Binary options traders can profit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.7850 for a risk/reward ratio of 1.0/3.90.
The shift from downward momentum, which has pressured the EURGBP into its current horizontal support level, to an upward drift is likely to be accompanied by an increase in volatility. Sellers would like to keep the downward momentum intact and prevent a breakout above the descending resistance level in order to extend the current move lower. Given the steep angle of the descend as well as the location of the horizontal support level lends a strong platform for buyers to force a breakout and extend an upward move back into its most recent intra-day high. This favors binary call options in the EURGBP currency pair.
The first resistance level, after a successful breakout above the descending resistance level, awaits the EURGBP at its intra-day high of 0.7912 which was reached on October 29th 2014. This level marks the last time this currency pair touched its descending resistance level which pushed the EURGBP to its current intra-day low. A breakout above this level will take the EURGBP to its intra-day high of 0.7985 which was reached on October 16th 2014. The final resistance level is located at its intra-day high of 0.8046 which was reached on October 15th 2014 from where a double top formation may emerge.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURGBP currency pair:
Eurozone Retail Sales for the month of September:
• Expectations: A monthly contraction of 0.8%, an annualized increase of 1.5%
• Previous Report’s Data: A monthly increase of 1.2% was reported in August, an annualized increase of 1.9%
• Impact on the Euro: Overall stable annualized retail sales out of the Eurozone may suffice to provide enough upward momentum for a breakout above its descending resistance level; this favors binary call options in the EURGBP currency pair
In addition the following economic report out of the United Kingdom is expected to impact the quote currency, the British Pound, of the EURGBP currency pair:
Markit/CIPS Composite/Services PMI for the month of October:
• Expectations: A reading of 57.0 for the Markit/CIPS Composite PMI, a reading of 58.5 for the Markit/CIPS Services PMI
• Previous Report’s Data: A reading of 57.4 for the Markit/CIPS Composite PMI was reported in September, a reading of 58.7 for the Markit/CIPS Services PMI
• Impact on the British Pound: The expected slowdown in both the Composite as well as Services PMI is expected to pressure the British Pound lower which favors binary call options in the EURGBP currency pair