May 29th, 2015 5:08 GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: USD/CAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1.2420
• Downside Potential: The downside potential for this binary put option is 380 pips to 1.2040
• Upside Potential: The upside potential for this binary put option is 120 pips to 1.2540
The USD/CAD has advanced inside of a narrow bullish price channel which took this currency pair from its intra-day low of 1.1919 reached on May 14th 2015 to its current intra-day high of 1.2538 recorded yesterday on May 28th 2015. The ascending support level can trace its origin to its intra-day low of 1.1925 which was set on May 14th 2015; this level is located below its horizontal support level and marked a false breakdown. The ascending resistance level originated from its intra-day high of 1.2256 reached on May 20th 2015. The steep advance has left the USD/CAD vulnerable for a breakdown.
Price action is now trading below of its horizontal resistance, which is being intersected by its bullish price channel, after a breakdown occurred yesterday. The USDCAD is anticipated to further breakdown below its ascending support level and enter a corrective phase. Binary options traders can benefit from the expected move to the downside with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1.2420 for a risk/reward ratio of 1.0/3.17.
The USDCAD witnessed a sharp contraction in volatility during its advance as the bullish price channel guided this currency pair to the upside, but as the USDCAD is trading inside of a newly formed horizontal resistance level an increase in volatility is anticipated. This has also been noted on various websites which publish binary option trading strategies that work. Buyers may attempt to add to the advance while sellers are favored to successfully force a breakdown from where this currency pair can enter a corrective phase.
The first support level awaits the USDCAD at its intra-day low of 1.2395 which was recorded on May 27th 2015. This represents the low of a minor drift to the downside and a false breakdown below its horizontal resistance level. A breakdown below this level will take the USDCAD to its intra-day high of 1.2256 which was reached on May 20th 2015 from where the ascending resistance level of its bullish price channel emerged. The next support level is located at its intra-day low of 1.2130 recorded on May 19th 2015 from where a final breakdown will take the USDCAD to its intra-day low of 1.2037 reached on May 18th 2015.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
Revised Gross Domestic Product for the first-quarter of 2015:
• Expectations: A quarterly contraction of 0.1% is expected for the first-quarter of 2015, an annualized contraction of 0.9%
• Previous Report’s Data: A quarterly contraction of 0.1% was initially reported in the first-quarter of 2015, an annualized increase of 0.2%
• Impact on the US Dollar: The expected annualized contraction in the GDP is likely to apply downward pressure on the US Dollar; this favors binary put options in the USDCAD currency pair
In addition the following economic report out of Canada is expected to impact the quote currency, the Canadian Dollar, of the USDCAD currency pair:
Gross Domestic Product for the month of March:
• Expectations: A monthly increase of 0.2% is expected for the month of March, an annualized increase of 2.1%
• Previous Report’s Data: A monthly level of 0.0% was reported in the month of February, an annualized increase of 2.1%
• Impact on the Canadian Dollar: The anticipated monthly increase in the GDP is likely to pressure the Canadian Dollar to the upside which favors binary put options in the USDCAD currency pair