March 3rd, 2015 5:19am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: GBPCHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1.4700
• Downside Potential: The downside potential for this binary put option is 615 pips to 1.4085
• Upside Potential: The upside potential for this binary put option is 200 pips to 1.4900The GBPCHF has entered a sideways trend after a strong advance took this currency pair from its intra-day low of 1.3985 which was reached on February 4th 2015 to its intra-day high of 1.4765 which was recorded on February 26th 2015. The sideways trend allowed for the formation of a new horizontal resistance level and after reaching its most recent intra-day high the GBPCHF drifted to the downside which led to a false breakdown below its horizontal resistance level. This move has now been reversed and the GBPCHF is trading back inside its horizontal resistance level, but formed a double top formation which may invite a reversal.
Price action has now drifted away from the top end of its horizontal resistance level and accumulated downward momentum. The GBPCHF is expected to resume its drift away from its most recent intra-day high until it will reach its ascending support level from where a breakdown is favored. Binary options traders can take advantage from the anticipated breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1.4700 for a risk/reward ratio of 1.0/3.08.
Volatility decreased as the sideways trend emerged and formed a new horizontal resistance level, but an increase in volatility is expected as the GBPCHF is likely to drift down to its ascending support level. Buyers may attempt to reverse the drift to the downside once price action will meet its ascending support level. Sellers are anticipated to take the build-up in downward momentum in order to successfully breakdown below its ascending support level and accelerate back down into its horizontal support level. This favors binary put options in the GBPCHF currency pair.
The GBPCHF will face its first support level at its ascending support level around the 1.4530 mark. This level represents a crucial support level and a breakdown will accelerate the move to the downside until it reaches its intra-day low of 1.4419 which was recorded on February 20th 2015. This level represents the low from a previous drift to the downside. A breakdown below this level will take the GBPCHF to its intra-day low of 1.4236 which was reached on February 12th 2015. The final support level is located at 1.4085, its intra-day low which was recorded on February 11th 2015.
The following economic data out of the United Kingdom is expected to impact the base currency, the British Pound, of the GBPCHF currency pair:
Markit/CIPS Construction PMI for the month of February:
• Expectations: A reading of 59.0 is expected for the month of February
• Previous Report’s Data: A reading of 59.1 was reported in the month of January
• Impact on the British Pound: The anticipated slowdown in the Markit/CIPS Construction PMI may suffice to pressure the British Pound to the downside which favors binary put options in the GBPCHF currency pair
In addition the following economic report out Switzerland is expected to impact the quote currency, the Swiss Franc, of the GBPCHF currency pair:
Gross Domestic Product for the fourth-quarter of 2014:
• Expectations: A quarterly increase of 0.3% is expected for the fourth-quarter, an annualized increase of 1.7%
• Previous Report’s Data: A quarterly increase of 0.6% was reported in the third-quarter, an annualized increase of 1.9%
• Impact on the Swiss Franc: The expected annualized slowdown in the Swiss GDP is not likely to apply downward pressure on the Swiss Franc; this favors binary put options in the GBPCHF currency pair