November 12th 2014 5:34am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EURGBP
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.7830
• Upside Potential: The upside potential for this binary call option is 215 pips to 0.8045
• Downside Potential: The downside potential for this binary call option is 100 pips to 0.7730
The EURGBP has now stabilized after an extended move to the downside took this currency pair from an intra-day high of 0.8046 which was reached on October 15th 2014 to an intra-day low of 0.7799 which was reached on November 6th 2014. A sideways trend has developed and formed a new horizontal support level which has eroded the downward momentum. The horizontal support level has been pierced by a descending resistance level which may exercise further downward pressure on the EURGBP, but is unlikely to succeed into forcing a further breakdown for an extension of the move lower.
Price action is now drifting inside its new horizontal support level and approaching its descending resistance level. The EURGBP is expected to successfully breakout above its descending resistance level and accelerate to the upside. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.7830 for a risk/reward ratio of 1.0/2.15.
Volatility has been deflated during the sideways trend, but as price action is trading around its descending resistance level volatility is expected to gradually improve. Sellers are anticipated to launch one final attempt at a breakdown below the new horizontal support level with the assistance of the descending resistance level. Any sustained move to the downside is not expected to last and buyers are favored to take control of price action, gather enough positive momentum and launch a breakout from where the EURGBP is likely to accelerate to the upside.
The first resistance level, after a successful breakout above its descending resistance level, awaits the EURGBP at its intra-day high of 0.7912 which was reached on October 29th 2014. This level has previously reversed a drift to the upside and pushed this currency pair into its most recent intra-day low. A breakout above this level will take the EURGBP to its intra-day low of 0.7947 which was reached on October 16th 2014. The final resistance level is located at 0.8046 which was reached on October 15th 2014 and from where a double formation may develop.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURGBP currency pair:
Eurozone Industrial Production for the month of September:
• Expectations: A monthly increase of 0.7%, an annualized contraction of 0.2%
• Previous Report’s Data: A monthly contraction of 1.8% was reported in August, an annualized contraction of 1.9%
• Impact on the Euro: The expected monthly increase in industrial production out of the Eurozone is expected to provide enough momentum to rally the Euro which 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:
Bank of England Inflation Report:
• Expectations: It is expected that the Bank of England will mention the decrease in inflationary pressures and use it to partially explain the delay of an interest rate increase
• Impact on the British Pound: The further delay of an increase in interest rates is expected to apply renewed downward pressure on the British Pound; this favors binary call options in the EURGBP currency pair