October 27th 2014 4:25am 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 0.7885
• Upside Potential: The upside potential for this binary call option is 160 pips to 0.8045
• Downside Potential: The downside potential for this binary call option is 65 pips to 0.7820
The EURGBP has sharply reversed its most recent move higher which unfolded after this currency pair reached an intra-day low of 0.7766 on September 30th 2014. The move upwards enjoyed support from a breakout as well as stronger economic data out of the Eurozone which lifted the Euro over the British Pound. The move higher recorded an intra-day high of 0.8046 on October 15th 2014 from where the EURGBP reversed gains back down into its horizontal support level.
Price action halted its reversal at a strong double support level comprised of the merger between its ascending support line with its horizontal support level from where the EURGBP is expected to move higher. Binary options traders can profit from the anticipated move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.7885 for a risk/reward ratio of 1.0/2.46.
Volatility is likely to increase as the EURGBP trades at an important support area. Sellers are expected to try and use the current downward momentum in order to force a breakdown below support for an extension of the reversal back down to its intra-day low of 0.7766. Buyers have multiple support levels from where the EURGBP is expected to reverse losses and move higher in order to challenge its intra-day high of 0.8046. There are move forces supporting a move higher than there are for a continuation of the downtrend which favors binary call options in the EURGBP currency pair.
The anticipated price action reversal will take the EURGBP to its next resistance level which is located at its intra-day high of 0.7942 which it reached on October 21st 2014. This level has previously pushed this currency pair lower after a brief drift higher. A breakout above this level will take the EURGBP to its intra-day high of 0.7981 which it reached on October 17th 2014. The final resistance level awaits this currency pair at its intra-day high of 0.8046 which it reached on October 15th 2014 from where a potential double top formation could push the EURGBP lower.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURGBP currency pair:
German IFO Data for the month of October:
• Expectations: IFO Business Climate at 104.5, IFO Current Assessment at 110.0, IFO Expectations at 99.2
• Previous Report’s Data: IFO Business Climate at 104.7 in September, IFO Current Assessment at 110.5, IFO Expectations at 99.3
• Impact on the Euro: The minor contractions in the German IFO data are expected to be overshadowed by bigger contraction in UK data; 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:
CBI Reported Sales for the month of October:
• Expectations: CBI Reported Sales at 25 in October
• Previous Report’s Data: CBI Reported Sales were reported at 31 in September
• Impact on the British Pound: The expected sharp slowdown in CBI Reported Sales is likely to place heavy downward pressure on the British Pound which favors binary call options in the EURGBP currency pair