February 16th, 2015 11:00am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: GBPUSD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1.5360
• Downside Potential: The downside potential for this binary put option is 410 pips to 1.4950
• Upside Potential: The upside potential for this binary put option is 140 pips to 1.5500The GBPUSD is currently in the midst of a drift to the downside which developed after this currency reached an intra-day high of 1.5440 yesterday on February 16th 2015. The GBPUSD is expected to challenge the low end of its horizontal resistance level from where a breakdown could transform the drift into a longer lasting corrective phase until the GBPUSD will reach its ascending support level. Downward momentum may be strong enough to force a final breakdown in order to lead this currency pair to its intra-day low of 1.4951 which was recorded on January 23rd 2015.
Price action is currently trading inside its horizontal resistance level where a continuation of the downtrend is likely. The GBPUSD is anticipated to resume its downtrend until it reaches its ascending support level from where a further breakdown is favored. Binary options traders can profit from the expected corrective phase with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1.5360 for a risk/reward ratio of 1.0/2.93.
Volatility has decreased during the advance, but an increase in volatility is expected as the drift to the downside is likely to gather more downward momentum and transform into a prolonged corrective phase. Buyers are expected step in and prevent a price action reversal from unfolding, but a sustained move to the upside from current levels is not anticipated. Sellers are likely to take advantage of the drift lower and force a breakdown below its ascending support level. This favors binary put options in the GBPUSD currency pair.
The GBPUSD will face its first resistance level, after a breakdown below its horizontal resistance level as well as steep ascending support level, at its intra-day low of 1.5209 which was reached on February 12th 2015. This level marked a reversal of a previous drift lower after it met its ascending support level. A breakdown below this level will lead the way down to its next ascending support level around the 1.5165 mark. The final support level is located at its intra-day low of 1.4951 which was reached on January 23rd 2015.
The following economic data out of the United Kingdom is expected to impact the base currency, the British Pound, of the GBPUSD currency pair:
Consumer Price Index for the month of January:
• Expectations: A contraction of 0.8% is expected for the month of January, an annualized increase of 0.4%
• Previous Report’s Data: A reading of 0.0% was reported in the month of December, an annualized increase of 0.5%
• Impact on the British Pound: The expected monthly deflationary reading in the CPI is likely to apply downward pressure on the British Pound; this favors binary put 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:
NAHB Housing Market Index for the month of February:
• Expectations: A level of 58 is expected for the month of February
• Previous Report’s Data: A level of 57 was reported in the month of January
• Impact on the US Dollar: The anticipated increase in the NAHB Housing Market Index may be enough to pressure the US Dollar to the upside which favors binary put options in the GBPUSD currency pair