September 4th 2014 5:39am 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 1.3150
• Upside Potential: The upside potential for this binary call option is 280 pips to 1.3430
• Downside Potential: The downside potential for this binary call option is 150 pips to 1.3000
The EURUSD is trying to form a bottom after a sharp correction depressed this currency pair which has completed a breakout during yesterday’s trading session. The EURUSD can trace the origin of its current pullback to an intra-day high of 1.3412 which it reached on August 15th 2014 and represented a lower high. An intra-day low of 1.3110 was recorded on September 2nd 2014 from where the current breakout emerged.
Price action is expected to resume its move upward after completing a breakout away from its falling wedge formation which is a bullish chart pattern. Binary options traders can capitalize from the expected continuation of the rally with binary call options. Today’s binary options trading strategy suggests call options to be placed below 1.3150 for a risk/reward ratio of 1.0/1.87.
The breakout above the descending resistance level of the EURUSD’s falling wedge formation, a bullish chart pattern which indicates the potential end of the previous trend and a pending reversal in price action, is a positive sign and the EURUSD is expected to resume it move higher especially if the European Central Bank remains on the sidelines and rules out quantitative easing in the near future; a likely outcome from today’s press conference which could push the Euro sharply higher. This scenario would favor binary call options in the EURUSD currency pair.
The next resistance level for the EURUSD awaits the expected continuation rally at 1.3224 which is an intra-day low reached on August 22nd 2014 from where this currency gaped lower. A successful breakout above this level will take the EURUSD to the 1.3336 level which is an intra-day low where the next horizontal resistance line could halt the advance in this currency pair. The next resistance would take the EURUSD back to the 1.3430 from where a double top formation could emerge.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
European Central Bank Announcement on Interest Rates, Marginal Lending Facility & Deposit Facility:
• Expectations: Interest Rate at 0.15%, Marginal Lending Facility Rate at 0.40%, Deposit Facility Rate at -0.10%
• Previous Meeting’s Announcement: Interest Rate at 0.15%, Marginal Lending Facility Rate at 0.40%, Deposit Facility Rate at -0.10%
• Impact on the Euro: Expectations grew for the European Central Bank to further ease monetary policy and even announce an outright quantitative easing program while the ECB may remain on the sideline and not act at all; 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:
Institute of Supply Management Non-Manufacturing Composite Index for the month of August:
• Expectations: A reading of 57.0 in the ISM Non-Manufacturing Index for the month of August
• Previous Month’s Data: A reading of 58.7 in the ISM Non-Manufacturing Index for the month of July
• Impact on the US Dollar: The sharp slowdown in the ISM Non-Manufacturing Index is expected to drop the US Dollar which favors binary call options in the EURUSD currency pair