March 9th, 2015 6:55am GMT, London UK
Today’s Binary Options Trading Strategy:
• Commodity: Silver
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 15.850
• Upside Potential: The upside potential for this binary call option is 155 pips to 17.400
• Downside Potential: The downside potential for this binary call option is 80 pips to 15.050Silver extended its move to the downside after Friday’s non-farm payroll report out of the US came in better than expected which resulted in a move out of Silver and into the US Dollar. Silver started its corrective phase from its intra-day high of 17.442 on February 13th 2015. After reaching an intra-day low of 16.083 on February 24th 2015 this commodity moved to the upside until its descending resistance level applied downward pressure from an intra-day high of 16.890 which was reached on February 26th 2015. The extension of the move to the downside reached an intra-day low of 15.735 today on March 9th 2015 where price action met its descending support level.
Price action is currently trading inside of its horizontal support level after bouncing higher from its most recent intra-day low. Silver is expected to move to the upside until it reaches its descending resistance level from where a breakout is favored. Binary options traders can profit from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 15.850 for a risk/reward ratio of 1.0/1.94.
Volatility decreased during the corrective phase as the move to the downside remained confined to a wide falling wedge formation which is forming from its bearish price channel. An increase in volatility is expected as buyers and sellers are set to face off inside its current support level. Sellers are likely to attempt a breakdown below its horizontal support level in order to keep the downtrend alive. Buyers are favored to force a move to the upside until this currency pair can breakout above its falling wedge formation and accelerate to the upside in order to challenge its intra-day high of 17.442.
Silver will face its first resistance level at its descending resistance level around the 16.150 mark. This level is just above the top end of its horizontal support level. A breakout will take Silver to its intra-day high of 16.890 which was recorded on February 26th 2015. This level marks the high of its previous advance, before the descending resistance level applied more downward pressure on this commodity. The final resistance level is located at its intra-day high of 17.442 which was reached on February 13th 2015 from where the corrective phase emerged.
The following economic data out of Japan already impacted Silver:
Japanese Trade Balance for the month of January:
• Expectations: A trade deficit of ¥936.0 billion was expected for the month of January
• Previous Report’s Data: A trade deficit of ¥395.6 billion was reported in the month of December
• Released Data: A trade deficit of ¥864.2 billion was reported for the month of January
• Impact on Silver: The reported trade deficit out of Japan sufficed to cause money flow back into Silver which favors binary call options in this commodity
In addition the following economic report out of Canada is expected to impact Silver:
Canadian Housing Starts for the month of February:
• Expectations: A reading of 179,000 is expected for the month of February
• Previous Report’s Data: A reading of 187,300 was reported in the month of January
• Impact on Silver: The expected slowdown in Canadian housing starts is likely to pressure Silver to the upside; this favors binary call options in Silver