March 6th, 2015 6:23am 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 1.1050
• Upside Potential: The upside potential for this binary call option is 400 pips to 1.1450
• Downside Potential: The downside potential for this binary call option is 150 pips to 1.0900The EURUSD resumed its corrective phase after the European Central Bank held steady on rates yesterday, which initially pressured this currency pair higher, but the speech by ECB President Mario Draghi from Cyprus provide the fundamental catalysts for more downside. The volatile trade lower did form a steep falling wedge formation which intersected its newly formed horizontal support level. The current stage of the corrective phase emerged after the EURUSD reached its intra-day high of 1.1450 on February 19th 2015.
Price action is now trading inside of its horizontal support level which managed to stabilize the move to the downside. The EURUSD is expected to successfully breakout above its steep falling wedge formation and accelerate to the upside. Binary options traders can benefit from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.1050 for a risk/reward ratio of 1.0/2.67.
Volatility remained contained as the EURUSD trended lower inside of its falling wedge formation until the speech yesterday by ECB President Mario Draghi which spiked volatility. A further increase in volatility is expected as buyers and sellers will test the newly formed horizontal support level. Sellers may attempt to force a breakdown in order to keep the corrective phase intact; a move which is unlikely to be sustained. Buyers are favored to breakout above its falling wedge formation as well as horizontal support level in order to test its most recent horizontal resistance level.
The EURUSD will test its first resistance level at its intra-day high of 1.1114 which was recorded yesterday on March 5th 2015. This was the result of the initial spike after the ECB announcement; a breakout above its descending resistance level will precede this move. The next resistance level awaits the EURUSD at its intra-day low of 1.1279 which was reached on February 20th 2015. This level represents the origin of its descending resistance level. A breakout above this level will take the EURUSD to its final resistance level at its intra-day high of 1.1450 recorded on February 19th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
Eurozone Gross Domestic Product for the fourth-quarter of 2015:
• Expectations: A quarterly increase of 0.3% is expected for the fourth-quarter of 2014, an annualized increase of 0.9%
• Previous Announcement: A quarterly increase of 0.3% was reported for the third-quarter of 2014, an annualized increase of 0.9%
• Impact on the Euro: The anticipated GDP growth rate out of the Eurozone may suffice to apply upward pressure on 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:
Non-Farm Payrolls & Unemployment Rate for the month of February:
• Expectations: The addition of 235,000 jobs is expected for the month of February, an unemployment rate of 5.6%
• Previous Report’s Data: The addition of 257,000 jobs was reported in the month of January, an unemployment rate of 5.7%
• Impact on the US Dollar: The expected slowdown in job creation in the US as measured by the NFP report is likely to pressure the US Dollar to the downside which favors binary call options in the EURUSD currency pair