March 26th, 2015 7:36am GMT, London UKToday’s Binary Options Trading Strategy:
• Commodity: Gold
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1,200.00
• Upside Potential: The downside potential for this binary put option is 5,725 pips to 1,142.75
• Downside Potential: The upside potential for this binary put option is 2,315 pips to 1,223.15
Gold has enjoyed a strong move to the upside after it reached an intra-day low of 1,142.72 on March 17th 2015. This commodity witnessed a sharp inflow in capital after the US Federal Reserve disappointed markets and struck a more dovish tone while expectations favored a hawkish statement by US Federal Reserve Chairwoman Janet Yellen. Gold accelerated sharply to the upside until it reached an intra-day high of 1,219.66 on March 26th 2015. This marked a lower high as compared to its previous intra-day high of 1,223.18 which was recorded on March 2nd 2015.
Price action is now trading inside of its horizontal resistance level and drifting away from its most recent intra-day high. Gold is expected to breakdown below its horizontal resistance level and accelerate back down into its horizontal support level. Binary options traders can take advantage from the anticipated breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1,200.00 for a risk/reward ratio of 1.0/2.47.
Volatility has decreased during the strong advance, but is expected to spike as Gold is trading inside of its horizontal resistance level which is being enforced by its descending resistance level. Buyers may attempt to force a breakout above this twin resistance level which is not expected to materialize above its intra-day high of 1,223.18. Sellers are expected to take the enforced resistance level as a platform to pressure Gold into a breakdown and accelerate into its next solid support level. This favors binary put options in Gold.
Gold will face its first support level at its intra-day low of 1,195.35 which was reached on March 3rd 2015. This level represents the low reached during a previous breakdown below its horizontal resistance level. A breakdown below this level will take Gold to its intra-day high of 1,187.90 which was reached on March 20th 2015 from where a further breakdown will take this commodity to its intra-day low of 1,155.19 which was recorded on March 10th 2015. This level marks the top end of its horizontal support level. The final support level is located at its intra-day low of 1,142.72 which was reached on March 17th 2015 from where a double bottom formation is possible.
The following economic data out of Japan already impacted Gold:
Jobless Rate for the month of February:
• Expectations: A jobless rate of 3.5% was expected for the month of February
• Previous Report’s Data: A jobless rate of 3.6% was reported in the month of January
• Released Data: A jobless rate of 3.5% was reported for the month of February
• Impact on Gold: The reported jobless rate out of Japan sufficed to result in an outflow of capital from Gold; this favors binary put options in this commodity
In addition the following economic report out of the United States is expected to impact Gold:
Annualized Gross Domestic Product for the fourth-quarter of 2014:
• Expectations: An annualized GDP increase of 2.4% is expected for the fourth-quarter of 2014
• Previous Report’s Data: An annualized GDP increase of 2.2% was initially reported for the fourth-quarter of 2014
• Impact on Gold: The anticipated upward revision in fourth-quarter GDP out of the US is likely to apply downward pressure on this commodity which favors binary put options in Gold