October 15th 2014 5:00am 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 1.2650
• Upside Potential: The upside potential for this binary call option is 250 pips to 1.2900
• Downside Potential: The downside potential for this binary call option is 150 pips to 1.2500
The EURUSD has found support after a prolonged move lower and successfully bounced off of its intra-day low of 1.2499 which it reached on October 6th 2014. The current move upward created a series of higher lows which further support a continuation of the current uptrend. The higher lows created an ascending support line pressuring the EURUSD upwards. The preceding move lower originated from an intra-day high of 1.2930 which it reached on September 19th 2014. A descending resistance level has led to the creation of a triangle formation.
Price action is currently trading around this triangle formation which is located just above its current horizontal support level. The EURUSD is expected to gather enough upward momentum in order to successfully breakout above resistance. Binary options traders can profit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2650 for a risk/reward ratio of 1.0/1.67.
Volatility is anticipated to increase as the EURUSD approaches either its descending resistance line or its ascending support line. The reason for the expected volatility spike is due to the expected attempt for a breakdown below support by sellers in order to extend the current move lower while buyers are likely to attempt a breakout above resistance in order to initiate a strong upward move which will challenge the next horizontal resistance line. Given the location of the triangle formation it is expected that the EURUSD will attempt a breakout which favors binary call options.
The EURUSD will face its first resistance level, after a successful breakout above its descending resistance line, at the 1.2791 level which is an intra-day high reached on October 9th 2014. This level has previously reversed a move higher and pushed the EURUSD into its ascending support line. A breakout above this level will take this currency pair to the 1.2816 level which is an intra-day low reached on September 22nd 2014. The last resistance level awaits the EURUSD at its intra-day high of 1.2930 which it reached on September 19th 2014.
The following economic data out of the Eurozone is expected to impact the the base currency, the Euro, of the EURUSD currency pair:
German Consumer Price Index EU Harmonized for the month of September:
• Expectations: A monthly reading of 0.0%, an annualized increase of 0.8%
• Previous Report’s Data: A monthly reading of 0.0% was reported in August, an annualized increase of 0.8%
• Impact on the Euro: The expected stagnation in German consumer prices is likely to place downward pressure on the Euro, but this is expected to be overshadowed by weak US data; 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:
Advanced Retail Sales for the month of September:
• Expectations: A monthly contraction of 0.1%, an increase of 0.2% in retail sales excluding autos
• Previous Report’s Data: A monthly increase of 0.6% was reported in August, an increase of 0.3% excluding autos
• Impact on the US Dollar: The expected contraction in advanced retail sales is likely to pressure the US Dollar lower which favors binary call options in the EURUSD currency pair