November 24th 2014 5:20am 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 1.2400
• Upside Potential: The upside potential for this binary call option is 360 pips to 1.2760
• Downside Potential: The downside potential for this binary call option is 120 pips to 1.2280
The EURUSD has dropped sharply after comments made by European Central Bank President Mario Draghi stated that inflation needs to be increased rather fast. Those comments surprised many and the Euro dropped sharply amid uncertainty how the ECB plans on succeeding. This halted an overall drift higher after the EURUSD reached an intra-day low of 1.2349 today on November 24th 2014. The preceding upward drift recorded an intra-day high of 1.2600 on November 19th 2014 which was a lower high than its previous intra-day high of 1.2771 reached on October 29th 2014.
Price action was reversed by the descending resistance level which formed as a result of the lower high and the EURUSD was pushed back inside its horizontal support level where it met its ascending support level. The EURUSD is now anticipated to move higher and breakout above its descending resistance level. 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 1.2400 for a risk/reward ratio of 1.0/3.00.
The EURUSD is likely to face low volatility inside its horizontal support level and challenged its most recent intra-day low of 1.2357 from where a double bottom formation developed. Sellers are expected to attempt a breakdown below this level in order to extend the downward momentum, but are unlikely to succeed. Buyers are favored to take the double bottom formation inside its horizontal support level as a platform to drift higher until a breakout above its descending resistance level will accelerate the move to the upside.
The first resistance level awaits the EURUSD at its descending resistance level around 1.2520. This level is expected to witness a spike in volatility as buyers and sellers will clash. A breakout above this level is expected to take the EURUSD to its intra-day high of 1.2600 which was reached on November 19th 2014. This level represents the high point of a previous drift to the upside. The final resistance level is located at its intra-day high of 1.2771 which was reached on October 29th 2014 from where the descending resistance level originates.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
German IFO Business Climate, IFO Current Assessment and IFO Expectations Index for the month of November:
• Expectations: IFO Business Climate at 103.0, IFO Current Assessment at 108.0 and IFO Expectations at 95.5
• Previous Report’s Data: IFO Business Climate was reported at 103.2 in October, IFO Current Assessment at 108.4 and IFO Expectations at 98.3
• Impact on the Euro: Given the previous surprise out of Germany it is likely that today’s IFO data will surprise to the upside which would lift 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:
Chicago Federal Reserve National Activity Index for the month of October:
• Expectations: A reading of 0.40 is expected for the month of October
• Previous Report’s Data: A reading of 0.47 was reported in September
• Impact on the US Dollar: The expected decrease in the Chicago Federal Reserve National Activity Index is likely to pressure the US Dollar to the downside which favors binary call options in the EURUSD currency pair