June 10th, 2015 4:58 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 60.60
• Upside Potential: The downside potential for this binary put option is 410 pips to 56.50
• Downside Potential: The upside potential for this binary put option is 90 pips to 61.50
Oil has enjoyed a sharp advance off of its intra-day low of 56.81 which was recorded on June 5th 2015. This intra-day low represented a higher low as compared to its previous intra-day low of 56.49 reached on May 28th 2015. The ascending support level which was formed as a result assisted the move to the upside which has now recorded an intra-day high of 60.75 today on June 10th 2015 and is approaching its descending resistance level. A review of lessons learned from binary options trading education suggests that the risk currently remains to the downside.
Price action is now trading inside of its horizontal resistance level from where upward momentum is being depleted. Oil is anticipated to drift to the downside and retrace it most recent advance in order to challenge its horizontal support level. Binary options traders can benefit from the expected contraction with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 60.60 for a risk/reward ratio of 1.0/4.56.
Oil was faced with a decrease in volatility as price action advanced from its enforced support level, but an increase in volatility is anticipated as this commodity is now trading at an enforced resistance level. Buyers may attempt to extend its current advance with a breakout above its descending resistance level as well as its horizontal resistance level, but its previous intra-day high of 61.54 which was reached on June 2nd 2015 is likely to limit any potential advance. Sellers are expected to take its enforced resistance level as a platform to for force Oil into a corrective phase. This favors binary put options in this commodity.
The first support level for Oil is located at its intra-day low of 58.39 reached on May 15th 2015. This level represents the low of a previous false breakdown below its horizontal resistance level. A breakdown below this level will lead this commodity to its ascending support level around the 57.25 mark which is located above its horizontal support level. The final support level awaits Oil at its intra-day low of 56.81 which was recorded on June 5th 2015 from where a double bottom formation may emerge.
The following economic data out of Japan already impacted Oil:
Machine Orders for the month of April:
• Expectations: A monthly contraction of 1.8% was expected for the month of April, an annualized contraction of 1.4%
• Previous Report’s Data: A monthly increase of 2.9% was reported in the month of March, an annualized increase of 2.6%
• Released Data: A monthly increase of 3.8% was reported for the month of April, an annualized increase of 3.0%
• Impact on Oil: The reported increase in machine tool orders has failed to pressure this commodity to the upside; this favors binary put options in Oil
In addition the following economic report out of the United States is expected to impact Oil:
Energy Information Agency Gasoline Inventories for the week of June 5th 2015:
• Expectations: A build-up of 533,000 barrels is expected for the week of June 5th 2015
• Previous Report’s Data: A drawdown of 334,000 barrels was reported in the week of May 29th 2015
• Impact on Oil: The expected build-up in gasoline inventories is likely to apply downward pressure on Oil which favors binary put options in this commodity