May 19th, 2015 5:08 GMT, London UK
Today’s Binary Options Trading Strategy:
• Commodity: Oil
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 60.10
• Upside Potential: The downside potential for this binary put option is 440 pips to 55.70
• Downside Potential: The upside potential for this binary put option is 245 pips to 62.55
Oil has retreated from its false breakout above its horizontal resistance level which reached an intra-day high of 62.56 on May 6th 2015. The retreat resulted in the creation of two additional lower highs with an intra-day high of 61.88 recorded on May 13th 2015 and an intra-day high of 61.69 reached yesterday on May 18th 2015. A descending resistance level emerged and has started to exercise downward pressure on this commodity. Oil has shown price movements over the past trading week’s which favor a put option trading approach in order to take advantage of the anticipated corrective phase in this commodity.
Price action is currently trading inside of its horizontal resistance level which is being enforced by its descending resistance level. Oil is expected to breakdown from current levels and fall into a corrective phase which will guide this commodity down to its horizontal support level. Binary options traders can profit from the move to the downside with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 60.10 for a risk/reward ratio of 1.0/1.80.
This commodity witnessed an increase in volatility which resulted from the hectic trading pattern over the past few trading days. Volatility is set to increase further as Oil is trapped inside of a triangle formation. Buyers are expected to attempt a breakout above its enforced resistance level which is likely to result in a false breakout. Binary option traders exercising a put option trading strategy are anticipated to take advantage of the expected breakdown in Oil as sellers are likely to successfully force a corrective phase. This favors binary put options in Oil.
Oil will face its first support level, after a breakdown below its horizontal resistance level, at its ascending support level around the 59.40 mark. This ascending support level represents a crucial support level from where an increase in volatility is anticipated. A breakdown below its triangle formation will take Oil to its intra-day low of 58.39 which was recorded on May 15th 2015. The next support level awaits Oil at its intra-day low of 56.59 reached on April 29th 2015. This level marks the top end of its horizontal support level. The final support level is located at its intra-day low of 55.69 which was recorded on April 22nd 2015.
The following economic data out of the United Kingdom is expected to impact Oil:
Annualized Consumer Price Index for the month of April:
• Expectations: A flat reading is expected in the annualized consumer price index for the month of April, an annualized increase of 1.0% in the core consumer price index
• Previous Report’s Data: A flat reading was reported in the annualized consumer price index for the month of March, an annualized increase of 1.0% in the core consumer price index
• Impact on Oil: The expected lack of inflationary pressure on the consumer front may suffice to apply downward pressure on Oil which favors binary put options in this commodity
In addition the following economic report out of the Eurozone is expected to impact Oil:
German ZEW Survey for the month of May:
• Expectations: A level of 49.0 is expected for the month of May
• Previous Report’s Data: A level of 53.3 was reported in the month of April
• Impact on Oil: The anticipated slump in the German ZEW Survey is likely to pressure this commodity to the downside; this favors binary put options in Oil