February 20th, 2015 5:40am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: USDCAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2500
• Upside Potential: The upside potential for this binary call option is 300 pips to 1.2800
• Downside Potential: The downside potential for this binary call option is 140 pips to 1.2360The USDCAD has caught a drift to the upside after it reached its intra-day low of 1.2362 on February 17th 2015 which marked a false breakdown below its horizontal support level. Price action has now drifted back inside this level and is preparing for a breakout. Upward momentum has increased after the USDCAD broke out above its ascending support level which is now enforcing its horizontal support level from where a breakout is expected to take this currency pair back to its intra-day high of 1.2799 recorded on January 30th 2015.
Price action is currently trading inside of its enforced horizontal support level with an accumulation of upward momentum. The USDCAD is anticipated to breakout above its descending resistance level and accelerate to the upside. Binary options traders can profit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2500 for a risk/reward ratio of 1.0/2.14.
The USDCAD experienced a trading environment with decreased volatility during its corrective phase away from its intra-day high of 1.2799. Volatility is expected to surge as price action is trading inside a triangle formation which started to narrow and therefore an increase in pressure for a sustained move emerged. Sellers may attempt to use the descending resistance level in order to pressure the USDCAD to the downside while buyers are favored to take the ascending support level, which is enforcing the horizontal support level, as a platform for a breakout and accelerated advance.
The first resistance level awaits the USDCAD at its descending resistance level around the 1.2555 mark. A breakout above this level will accelerate the USDCAD to its next resistance level at its intra-day high of 1.2697 which was reached on February 11th 2015. This marked the high reached during a previous advance which was reversed into a higher low. The final resistance level is located at its intra-day high of 1.2799 which was reached on January 30th 2015 from where a double top formation is expected to develop.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
Preliminary Markit Manufacturing PMI for the month of February:
• Expectations: A level of 53.6 is expected for the month of February
• Previous Report’s Data: A level of 53.9 was reported for the month of January
• Impact on the US Dollar: The anticipated slowdown in the Markit Manufacturing PMI is likely to be overshadowed by economic data out of Canada which favors binary call 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:
Retail Sales for the month of December:
• Expectations: A contraction of 0.4% is expected for the month of December, excluding auto sales a contraction of 0.8%
• Previous Report’s Data: An increase of 0.4% was reported for the month of November, excluding auto sales an increase of 0.7%
• Impact on the Canadian Dollar: The expected contraction in retail sales during the important shopping month of December is likely to pressure the Canadian Dollar to the downside; this favors binary call options in the USDCAD currency pair