September 29th 2014 5:37am 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 1.2690
• Upside Potential: The upside potential for this binary call option is 310 pips to 1.3100
• Downside Potential: The downside potential for this binary call option is 90 pips to 1.2600
The EURUSD has resumed its corrective move throughout the previous week which led to a breakdown below a key support level, but this currency pair did form a falling wedge formation and the narrow body suggests that price action could be pressured higher. The current part of the EURUSD correction took this currency pair from an intra-day high of 1.3154 reached on September 4th 2014 to an intra-day low of 1.2666 reached today on September 29th 2014.
Price action is currently drifting lower alongside its descending support line of its falling wedge formation. Given the narrow body of this bullish chart pattern upside pressures are expected to build up. Binary options traders can take advantage from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2690 for a risk/reward ratio of 1.0/3.44.
An increase in volatility is likely to accompany price action over the next few trading sessions as sellers may attempt to cause a breakdown below the falling wedge formation which would open the path for more downside potential. Buyers are expected to use the bullish chart patterns as a platform to initiate a trend reversal and push the EURUSD higher. A breakout above the descending resistance line should be expected which is likely to trigger more upward potential in this currency pair.
The next resistance level, after a successful breakout above the descending resistance line of the falling wedge formation, awaits the EURUSD at the 1.2859 level which is an intra-day low reached on September 9th 2014 from where the EURUSD previously broken a downtrend and moved higher. A breakout above this level will take the EURUSD to the 1.2995 level which is an intra-day high reached on September 16th 2014. The final resistance level is located at the intra-day high of 1.3154 reached on September 4th 2014 where a double top formation is likely to emerge.
The following economic data out of the Eurozone is expected to impact the the base currency, the Euro, of the EURUSD currency pair:
Eurozone Confidence Data for the month of September:
• Expectations: Economic confidence at 99.9, industrial confidence at -5.8, consumer confidence at -11.4 and services confidence at 2.5
• Previous Report’s Data: Economic confidence at 100.6 in August, industrial confidence at -5.3, consumer confidence at -11.4 and services confidence at 3.1
• Impact on the Euro: The expected slowdown in confidence data out of the Eurozone may be overshadowed by anticipated weakness out of the US; 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:
Personal Income & Spending for the month of August:
• Expectations: Personal income increase of 0.3%, personal spending increase of 0.4%
• Previous Report’s Data: Personal income increase of 0.2% in July, personal spending contraction of 0.1%
• Impact on the US Dollar: Personal spending data is prone for another disappointment which favors binary call options in the EURUSD currency pair