February 25th, 2015 6:13am 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 1.1350
• Upside Potential: The upside potential for this binary call option is 180 pips to 1.1530
• Downside Potential: The downside potential for this binary call option is 80 pips to 1.1270The EURUSD has been confined to a sideways trend located around a strong horizontal support level. An attempt at a breakout was reversed at the midpoint between its horizontal support level and its horizontal resistance level. The lower boundary of this rectangle formation is defined by its intra-day low of 1.1270 which was reached on February 9th 2015 while the upper boundary is defined by its intra-day high of 1.1534 which was recorded on February 3rd 2015. The EURUSD is expected to trade inside this rectangle formation until a fundamental factor can either pressure this currency pair into a breakout above or breakdown below it.
Price action is currently trading at the top end of its horizontal support level from where a continuation of the uptrend is likely. The EURUSD is expected to breakout above this zone and advance until it reaches its horizontal resistance level. Binary options traders can take advantage from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.1350 for a risk/reward ratio of 1.0/2.25.
The EURUSD has been exposed to a trading environment with low volatility as price action remained trapped inside its rectangular chart pattern. The horizontal support level stabilized any move to the downside while the horizontal resistance level prevented a breakout from materializing. Volatility is likely to increase as this currency pair will attempt to breakout above its horizontal support level and advance back into its horizontal resistance level. A descending resistance level may additionally increase volatility as buyers and sellers will face off. The EURUSD is expected to successfully breakout above its descending resistance level which favors binary call options in this currency pair.
The first resistance level awaits the EURUSD at its descending resistance level around the 1.1385 mark. This represents a crucial resistance level for this currency pair and a breakout will take the EURUSD to its intra-day high of 1.1450 which was reached on February 19th 2015. This level represents the high reached during a previous advance. A breakout above this level will take the EURUSD to its final resistance level located at its intra-day high of 1.1534 which was reached on February 3rd 2015. A double top formation is likely to revers price action at this level.
There is no economic data out of the Eurozone expected to impact the base currency, the Euro, of the EURUSD currency pair. European Central Bank President Draghi will take part in a European Parliament Debate, but this is not expected to impact the Euro. The lack of economic news will allow the Euro to be dictated solely by technical factors which favor binary call options in the EURUSD currency pair.
In addition the following economic report out the United States is expected to impact the quote currency, the US Dollar, of the EURUSD currency pair:
New Home Sales for the month of January:
• Expectations: A contraction of 2.3% is expected for the month of January
• Previous Report’s Data: An increase of 11.6% was reported in the month of December
• Impact on the US Dollar: The expected contraction in New Home Sales will follow a very strong report in the previous month for a solid two month average increase of 4.7% and may suffice to pressure the US Dollar to the upside; this favors binary call options in the EURUSD currency pair