October 31st 2014 5:15am GMT, London UKToday’s Binary Options Trading Strategy:
Today’s Binary Options Trading Strategy:
• Currency Pair: EURUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2590
• Upside Potential: The upside potential for this binary call option is 295 pips to 1.2885
• Downside Potential: The downside potential for this binary call option is 90 pips to 1.2500
The EURUSD has reversed its most recent gains as the US Dollar rallied after the US Federal Reserve has exited its quantitative-easing-three economic stimulus package which pushed the EURUSD from its intra-day high of 1.2887 which it reached on October 15th 2014 to its intra-day low of 1.2547 reached yesterday on October 30th 2014. This marked a higher low as compared to its previous intra-day low of 1.2499 which it reached on October 6th 2014 and allowed for the creation of an ascending support level.
Price action has bounced off of its intra-day low as well as its ascending support level and is currently drifting higher. The EURUSD is expected to gain enough upward momentum as it approaches its descending resistance level in order to complete a breakout. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2590 for a risk/reward ratio of 1.0/3.28.
Volatility has increased during the sharp move lower and is expected to remain elevated as the EURUSD is trapped in a triangle formation. The intra-day low of 1.2547 was a higher low as compared to its previous intra-day low of 1.2499 which was reached on October 3rd 2014 and allowed for the creation of an ascending support level. This ascending support level has initiated the drift higher and is expected to unfold into a larger upward move which is likely to test its most recent intra-day high after a successful breakout above its descending resistance level.
The EURUSD will face its first resistance test after a successful breakout at its intra-day high of 1.2771 which was reached on October 29th 2014. This level has pushed the EURUSD into its ascending support level. The next resistance level awaits this currency pair at its intra-day high of 1.2840 which was reached on October 21st 2014. This level has previously reversed a move higher. The final resistance level is located at its intra-day high of 1.2887 which was reached on October 15th 2014 from where a double top formation may emerge.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
Eurozone Consumer Price Index for the month of October:
• Expectations: An annualized increase of 0.4% in the CPI, an annualized increase of 0.8% in the core CPI
• Previous Report’s Data: An annualized increase of 0.3% in the CPI was reported in September, an annualized increase of 0.8% in the core CPI
• Impact on the Euro: The expected increase in consumer inflation out of the Eurozone is expected to rally the Euro higher which 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 & Personal Spending Data for the month of September:
• Expectations: An increase of 0.3% in personal income, and increase of 0.1% in personal spending
• Previous Report’s Data: An increase of 0.3% in personal income was reported in August, and increase of 0.5% in personal spending
• Impact on the US Dollar: The anticipated contraction in personal spending is expected to pressure the US Dollar lower; this favors binary call options in the EURUSD currency pair