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By: Adam Stone
September 22th 2014 5:58am GMT, London UK

Today’s Binary Options Trading Strategy:

• Currency Pair: EURUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2860
• Upside Potential: The upside potential for this binary call option is 200 pips to 1.3060
• Downside Potential: The downside potential for this binary call option is 110 pips to 1.2750

The EURUSD has been under sustained selling pressure for an extended period of time, but has managed to carve out a horizontal support level which has not been violated so far. While limited downside potential has not been ruled out the excessive selling pressure seems to be receding. The last part of the current corrective phase has taken the EURUSD from an intra-day high of 1.3221 reached on August 28th 2014 to an intra-day low of 1.2831 which it reached on September 19th 2014.

Price action is currently trading around its horizontal support line from where it is expected to stabilize while attempting to reverse its sharp contraction partially until it reaches its next horizontal resistance level. Binary options traders can take advantage from the expected move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2860 for a risk/reward ratio of 1.0/1.82.

Binary options trading on EURUSD 2014-22-9

Traders should account for a sharp increase in volatility as sellers may try to force a breakdown of its current horizontal support line which would take the EURUSD down by roughly 100 pips; a further breakdown is unlikely. Buyers will attempt to use support and launch a reversal which is expected to guide the EURUSD back into its next horizontal resistance level from where the current correction gathered steam.

The EURUSD will face its first major resistance level at 1.2930 which is an intra-day high reached on September 18th 2014 and marks a level where a previous breakout rally fell short. A successful and sustained breakout will take the EURUSD to the 1.2995 level which is an intra-day high reached on September 16th 2014 and represents the high reached before the most recent drop in price action. The next resistance level awaits the EURUSD at the 1.3060 level where price action will meet a descending support line.

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

Eurozone Consumer Confidence for the month of September:

• Expectations: A monthly contraction of 10.5% is expected for September
• Previous Month’s Data: A monthly contraction of 10.0% was reported in August
• Impact on the Euro: The expected contraction in Eurozone consumer confidence is unlikely to pressure the Euro; this favors binary call options in the EURUSD currency pair

In addition the following economic report out of the United States is expected to impact the quote currency, the US Dollar, of the EURUSD currency pair:

Existing Home Sales for the month of August:

• Expectations: A monthly increase of 1.0% is expected for August
• Previous Month’s Data: A monthly increase of 2.4% was reported in July
• Impact on the US Dollar: The slowdown in the expansion of existing home sales may suffice to pressure the US Dollar lower which favors binary call options in the EURUSD 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.
Adam Stone
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