August 21st 2014 5:30am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EURUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek call options on dips below 1.3250
• Upside Potential: The upside potential for this call option is 150 pips to 1.3400
• Downside Potential: The downside potential for this call option is 70 pips to 1.3180
The EURUSD continued its severe sell-off further into extremely depressed levels and has now formed a bearish price channel which is a bearish chart formation. On the H4 chart this currency pair has recorded an intra-day high of 1.3476 reached on July 25th 2014 and an intra-day low of 1.3242 reached today on August 21st 2014. The drift lower has set a series of lower highs and lower lows.
Price action is currently trading lower alongside its descending support line from its bearish price channel. This currency pair is expected to reverse from current levels as the chart pattern is expected to remain intact. 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 below 1.3250 for a risk/reward ratio of 1.0/2.14.
The EURUSD may attempt a series of false breakdown below its descending support line, but it is expected that price action will reverse sharply from any breakdown especially if today’s PMI data come in favorable which will help this currency pair spike higher from its current extreme depressed territory. An increase in volume as well as volatility from current level is also expected and a capitulation intra-day low may emerge before a complete trend reversal and successful breakout from its current bearish chart pattern.
The first resistance for the EURUSD currency pair will await the rally at 1.3310 where price action will meet the descending resistance line of its bearish price channel. Given the expected momentum of the reversal rally the EURUSD is likely to breakout and resume its relieve rally until next resistance at 1.3404. This level is an intra-day low reached on July 29th 2014 and marks the low end of a strong horizontal resistance level.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
Eurozone Composite PMI, Manufacturing PMI and Services PMI for August:
• Expectations: Eurozone Composite at 53.4, Eurozone Manufacturing PMI at 51.3, Eurozone Services PMI at 53.7
• Previous Month’s Data: Eurozone Composite at 53.8 in July , Eurozone Manufacturing PMI at 51.8, Eurozone Services PMI at 54.2
• Impact on Euro: A stable PMI report or upward surprise is expected to spike the Euro which will favor binary call options in the EURUSD currency pair
In addition the following economic reports out of the United States are expected to impact the quote currency, the US Dollar, of the EURUSD currency pair:
Initial Jobless Claims/Continuing Jobless Claims:
• Expectations: Initial jobless claims at 303,000, continuing claims at 2,520,000
• Previous Week’s Data: Initial jobless claims at 311,000, continuing claims at 2,544,000
• Impact on US Dollar: Initial jobless claims data as well as continued claims are not expected to surprise traders and therefore the impact will be limited; this further favors binary call options in the EURUSD
Existing Home Sales for July:
• Expectations: Existing homes sales contraction of 0.5%
• Previous Month’s Data: Existing home sales increase of 2.6% in June
• Impact on US Dollar: A weaker US housing market will pressure the US Dollar lower which favors binary call options in the EURUSD