October 2nd 2014 5:20am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: GBPUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.6240
• Upside Potential: The upside potential for this binary call option is 280 pips to 1.6520
• Downside Potential: The downside potential for this binary call option is 180 pips to 1.6060
The GBPUSD experienced a sharp move upward from depressed levels after the Scottish Independence vote favored remaining part of the United Kingdom. The sharp rally was quickly reversed lower and took this currency pair into a very solid support level. The GBPUSD started its current correction from an intra-day high of 1.6524 which it reached on September 19th 2014 to an intra-day low of 1.6161 which it reached yesterday on October 1st 2014. The preceding rally was launched from an intra-day low of 1.6052 which it reached on September 10th 2014.
Price action is currently stabilizing its move lower at a strong horizontal support level which additionally created a double bottom formation, a bullish chart pattern, expected to provide further support for a renewed push higher. Binary options traders can profit from the anticipated move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.6240 for a risk/reward ratio of 1.0/1.56.
Volatility is expected to increase as buyers will try to hold the double support levels, the horizontal support level as well as the double bottom formation, which are additionally enforced by an ascending support line and use them to reverse the current reversal. The GBPUSD is currently in the process of an attempted move higher. Sellers could attempt to force a false breakdown which should be taken as a better entry opportunity for binary call options in the GBPUSD currency pair which is expected to move upward and test its intra-day high of 1.6524 once again.
The first resistance level awaits the GBPUSD at the 1.6277 level which is an intra-day reached on September 12th 2014 and represents a level where a previous move higher was stopped and reversed. A successful breakout above this level will take the GBPUSD to the 1.6413 level which is an intra-day high reached on September 24th 2014 from where the current move lower gained momentum. The final resistance level awaits this currency pair at the intra-day high of 1.6524 which it reached on September 19th 2014.
The following economic data out of the United Kingdom is expected to impact the the base currency, the British Pound, of the GBPUSD currency pair:
Markit/CIPS Construction PMI for the month of September:
• Expectations: A reading of 63.5 is expected for the month of September
• Previous Report’s Data: A reading of 64.0 was reported for the month of August
• Impact on the British Pound: The expected slowdown is not expected to pressure the British Pound lower and focus will be on the expected contraction in US factory orders; this favors binary call options in the GBPUSD 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 GBPUSD currency pair:
Factory Orders for the month of August:
• Expectations: A contraction of 9.5% is expected for the month of August
• Previous Report’s Data: An expansion of 10.5% was reported for the month of July
• Impact on the US Dollar: The expected plunge in factory orders is expected to pressure the US Dollar which favors binary call options in the GBPUSD currency pair