December 9, 2014 8:47am 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 1.2310
• Upside Potential: The upside potential for this binary call option is 230 pips to 1.2540
• Downside Potential: The downside potential for this binary call option is 110 pips to 1.2200
The EURUSD was faced with a continuation of its move to the downside amid a better than expected non-farm payrolls report out of the United States released last Friday. This has added to the existing downward momentum, but did form a falling wedge formation which is a bullish chart pattern. In addition this currency pair is in the process of carving out a new horizontal support level. The current move to the downside developed after the EURUSD reached an intra-day high of 1.2600 on November 19th 2014. The move lower set an intra-day low of 1.2247 yesterday on December 8th 2014 from where a drift higher emerged.
Price action is now trading inside its horizontal support level as well as inside its falling wedge formation. The EURUSD is expected to drift into its descending resistance level from its falling wedge formation from where a breakout is expected to accelerate a move to the upside. Binary options traders can take advantage from the anticipated move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2310 for a risk/reward ratio of 1.0/2.09.
The EURUSD is expected to witness a spike in volatility as price action is approaching its descending resistance level. Sellers will try to prevent a successful breakout from unfolding and pressure the EURUSD further to the downside. Buyers are expected to take the current horizontal support area in combination with the falling wedge formation in order to force a breakout and accelerate to the upside. This favors binary call options in the EURUSD currency pair.
The first resistance level, after a successful breakout above its rising wedge formation, awaits the EURUSD at its intra-day low of 1.2349 which was reached on November 24th 2014. This level has previously reversed a move lower and pushed the EURUSD back into its descending resistance level. A breakout above this level will take the EURUSD to its intra-day high of 1.2456 which was reached on December 4th 2014. This marked the high-point of a move higher prior to the most recent move to the downside. The next resistance level is located at its intra-day high of 1.2532 which was reached on November 26th 2014 and the final resistance level is comprised by its intra-day high of 1.2600 which was reached on November 19th 2014.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
German Trade Balance for the month of October:
• Expectations: A trade surplus of €18.9 billion is expected for the month of October
• Previous Report’s Data: A trade surplus of €21.9 billion was reported in September
• Impact on the Euro: The continued trade surplus out of Germany is expected to suffice for a move to the upside in the Euro 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:
Wholesale Inventory and Sales for the month of October:
• Expectations: An increase of 0.2% in wholesale inventories, a contraction of 0.1% in wholesale sales
• Previous Report’s Data: An increase of 0.3% in wholesale inventories was reported in September, an increase of 0.2% in wholesale sales
• Impact on the US Dollar: The expected contraction in wholesale sales for October is likely to pressure the US Dollar to the downside; this favors binary call options in the EURUSD currency pair