March 12th, 2015 6:40am GMT, London UK
Today’s Binary Options Trading Strategy:
• Commodity: Gold
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1,152.50
• Upside Potential: The upside potential for this binary call option is 8,400 pips to 1,236.50
• Downside Potential: The downside potential for this binary call option is 2,250 pips to 1,130.00Gold dropped sharply after the release of the non-farm payroll report out of the US last Friday which showed a better than expected headline figure. This drop extended the move to the downside which developed after this commodity recorded its intra-day high of 1,236.59 on February 16th 2015. Hope for a faster increase in interest rates by the US Federal Reserve has caused an exodus of capital from gold which is viewed as a safe haven investment and usually performs poor during times of optimism. Gold reached an intra-day low of 1,147.49 yesterday on March 11th 2015.
Price action is now trading inside of its horizontal support level from where downward pressure is fading and this commodity is witnessing an increase in upward momentum. Gold is anticipated to reverse its most recent drop and trend higher until it can successfully breakout above its descending resistance level. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1,152.50 for a risk/reward ratio of 1.0/3.73.
Gold was exposed to a trading environment which featured a sharp decrease in volatility as price action moved further to the downside. As the horizontal support level has stabilized the decline an increase in volatility is expected. Sellers may attempt to force a breakdown below its horizontal support level in order to keep the downtrend intact. Given expected economic developments further downside appears extremely limited from current levels. Buyers are anticipated to take this stable environment as a platform to drift back to the upside and into its descending resistance level from where a breakout is very likely to occur. This favors binary call options in gold.
The first resistance level awaits gold at its intra-day high of 1,175.27 which was reached on March 9th 2015. This represents the high reached during a previous bounce off of the top end of its current horizontal support level. A breakout above this level will take gold to its descending resistance level around the 1,190.00 mark from where a further breakout will take this commodity to its intra-day high of 1,223.18 which was recorded on March 2nd 2015. This level represents the bottom end of its horizontal resistance level from where this commodity experienced a sharp increase in downward pressure. The final resistance level is located at its intra-day high of 1,236.59 which was reached on February 16th 2015.
The following economic data out of Japan already impacted Gold:
Tertiary Index for the month of January:
• Expectations: A monthly increase of 0.5% was expected for January
• Previous Report’s Data: A monthly contraction of 0.3% was reported in December
• Released Data: A monthly increase of 1.4% was reported for January
• Impact on Gold: The reported increase in the Tertiary Index out of Japan failed to prevent an inflow of capital into gold; this favors binary call options in this commodity
In addition the following economic report out of the United States is expected to impact Gold:
Advanced Retail Sales for the month of February:
• Expectations: An increase of 0.3% is expected for the month of February
• Previous Report’s Data: A contraction of 0.8% was reported in the month of January
• Impact on Gold: The anticipated increase in advanced retail sales out of the United States is unlikely to support a weaker price in gold which favors binary call options in this commodity