May 11th, 2015 5:30am GMT, London UK
Today’s Binary Options Trading Strategy:
• Commodity: Silver
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 16.400
• Upside Potential: The downside potential for this binary put option is 80 pips to 15.600
• Downside Potential: The upside potential for this binary put option is 35 pips to 16.750
Silver has been exposed to a hectic trading pattern which emerged after this commodity reached its intra-day low of 15.598 on April 24th 2015. A sharp advance followed and spiked Silver to an intra-day high of 16.732 which was recorded on April 30th 2015. This level is located just above its horizontal resistance level from where Silver dropped to a higher low with an intra-day low of 15.815 which was also recorded on April 30th 2015. Fundamental factors have contributed to this sharp drop. The higher low allowed for the formation of an ascending support level which advanced Silver to a higher high with an intra-day high of 16.761 reached on May 4th 2015.
Price action is now trading inside of its horizontal resistance level after the formation of a descending resistance level exercised downward pressure on this commodity. Silver is anticipated to resume its drift to the downside until a breakdown below its ascending support level will develop. Binary options traders can take advantage from the expected breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 16.400 for a risk/reward ratio of 1.0/2.29.
Silver was exposed to an increase in volatility which accompanied the violent trading pattern and volatility is expected to increase further as this commodity is trapped inside of a triangle formation. The intersection between its ascending support level and its descending resistance level is located just beneath its horizontal resistance level. Buyers are expected to pressure Silver to the upside, but its most recent intra-day high of 16.761 is anticipated to prevent an extension of the advance. Sellers are likely to successfully force a breakdown below its ascending support level from where this commodity can accelerate down into its horizontal support level.
The first support level awaits Silver at its intra-day low of 16.173 which was recorded on May 7th 2015. This level represents the last instance where the ascending support level reversed a drift to the downside. A breakdown will clear the way down to its intra-day low of 15.815 which was reached on April 30th 2015. This level marks the top end of its horizontal support level. The final support level is located at its intra-day low of 15.598 which was recorded on April 24th 2015 from where a double bottom formation may emerge.
The following economic data out of China already impacted Silver:
People’s Bank of China One-Year Lending Rate:
• Expectations: A One-Year Lending Rate of 5.35% was expected
• Previous Announcement: A One-Year Lending Rate of 5.35% was reported
• Released Data: A One-Year Lending Rate of 5.10% was reported
• Impact on Silver: The unexpected cut in the One-Year Lending Rate out of the PBOC has failed to pressure Silver to the upside which favors binary put options in this commodity
In addition the following economic report out of the United Kingdom is expected to impact Silver:
Bank of England Interest Rate Announcement & Asset Purchase Target:
• Expectations: The interest rate unchanged at 0.50%, the Asset Purchase Target unchanged at £375 billion
• Previous Announcement: The interest rate unchanged at 0.50%, the Asset Purchase Target unchanged at £375 billion
• Impact on Silver: The statement which will follow the announcement may not suggest any change in the status quo and is likely to pressure this commodity to the downside which favors binary put options in Silver