December 2, 2014 4:36am 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 1.5750
• Upside Potential: The upside potential for this binary call option is 270 pips to 1.6020
• Downside Potential: The downside potential for this binary call option is 165 pips to 1.5585
The GBPUSD currently enjoys a bounce higher after recording an intra-day low of 1.5585 yesterday on December 1st 2014. This intra-day low marked a false breakdown below its ascending support level as well as its horizontal support level, but was quickly reversed which took this currency pair back inside its horizontal support level. The GBPUSD has previously corrected after reaching an intra-day high of 1.6021 on November 5th 2014. The current intra-day low has additionally formed a triple bottom formation.
Price action is now trading inside its horizontal support level from where a sideways trend may develop until the ascending support level can apply upward pressure on this currency pair. The GBPUSD is anticipated to move to the upside and challenge its most recent intra-day high. Binary options traders can profit from the expected move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.5750 for a risk/reward ratio of 1.0/1.64.
The GBPUSD may face an increase in volatility as price action is approaching a breakout. Sellers are expected to step in and prevent a sustainable breakout from developing by using the downward pressure form the descending resistance level which has previously halted a further advance. Buyers are anticipated to use the ascending support level, which has merged with its horizontal support level, together with the upward momentum from the current bounce off of its most recent intra-day low in order to accelerate to the upside. This favors binary call options in the GBPUSD currency pair.
The first resistance level after a successful breakout above its descending resistance level, and its triangle formation, awaits the GBPUSD at its intra-day high of 1.5826 which was reached on November 27th 2014. This level has previously reversed a drift higher. A successful breakout will take this currency pair to its intra-day high of 1.5945 which was reached on November 11th 2014. This level has pushed the GBPUSD to the first intra-day low of its tripe bottom formation. The final resistance level is located at its intra-day high of 1.6021 which was reached on November 5th 2014 from where a double top formation may form.
The following economic data out of the United Kingdom is expected to impact the base currency, the British Pound, of the GBPUSD currency pair:
Markit/CIPS Construction PMI for the month of November:
• Expectations: A reading of 61.0 is expected for the month of November
• Previous Report’s Data: A reading of 61.4 was reported in October
• Impact on the British Pound: The expected slowdown in the Markit/CIPS Construction PMI is likely to be overshadowed by data out of the US; 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:
Construction Spending for the month of October:
• Expectations: A monthly increase of 0.6% is expected for October
• Previous Report’s Data: A monthly contraction of 0.4% was reported in September
• Impact on the US Dollar: The expected increase in US construction spending may be too optimistic judging by other economic reports released and a disappointment is expected to pressure the US Dollar to the downside which favors binary call options in the GBPUSD currency pair