December 23, 2014 4:15am 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 1.5600
• Upside Potential: The upside potential for this binary call option is 225 pips to 1.5825
• Downside Potential: The downside potential for this binary call option is 60 pips to 1.5540
The GBPUSD has now reversed back into its horizontal support level after recording an intra-day high of 1.5786 on December 16th 2014. This marked a lower high as compared to its previous intra-day high of 1.5826 which was reached on November 27th 2014 and allowed for the formation of a descending resistance level. The price action reversal resulted into a false breakdown below its horizontal support level, but did mark a higher low with an intra-day low of 1.5544 which was reached on December 17th 2014.
Price action has bounced off of its intra-day low and after a false breakout above its horizontal support level is now trading back inside it. The ascending support level has merged with its horizontal support level and the GBPUSD is expected to launch a breakout and move to the upside. Binary options traders can take advantage from the anticipated move to the upside with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.5600 for a risk/reward ratio of 1.0/3.75.
Volatility has decreased after the GBPUSD dropped back into its horizontal support level which is being intersected by its ascending support level. An increase in volatility is expected as sellers are likely to attempt another breakdown below its merged support area which is unlikely to materialize below its intra-day low of 1.5541 which was reached on December 8th 2014. Buyers are expected to take the merged support area as a platform to launch a move to the upside. This favors binary call options in the GBPUSD currency pair.
The first resistance level awaits the GBPUSD at its intra-day high of 1.5682 which was reached on December 19th 2014. This level has previously halted an advance and pushed this currency pair back into its horizontal support level. A breakout above this level will take the GBPUSD to its descending resistance level around the 1.5755 mark. This level has ended the preceding advance and pressured this currency pair to the downside. The final resistance level is located at its intra-day high of 1.5826 which was recorded on November 27th 2014.
The following economic data out of the United Kingdom is expected to impact the base currency, the British Pound, of the GBPUSD currency pair:
Final Gross Domestic Product for the third-quarter of 2014:
• Expectations: A quarterly increase of 0.7% is expected in the final reading, an annualized increase of 3.0%
• Previous Report’s Data: A quarterly increase of 0.7% was initially reported, an annualized increase of 3.0%
• Impact on the British Pound: The anticipated growth rate in the third-quarter GDP should suffice to pressure the British Pound to the upside which 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:
New Home Sales for the month of November:
• Expectations: An increase of 0.4% is expected for the month of November
• Previous Report’s Data: An increase of 0.7% was reported for the month of October
• Impact on the US Dollar: The expected slowdown in new home sales, after existing home sales plunged yesterday, is anticipated to pressure the US Dollar to the downside; this favors binary call options in the GBPUSD currency pair