January 1st, 2015 5:19am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: USDCAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1.1630
• Downside Potential: The downside potential for this binary put option is 290 pips to 1.1340
• Upside Potential: The upside potential for this binary put option is 70 pips to 1.1700
The USDCAD has embarked on a downward move after reaching its intra-day high of 1.1673 on December 15th 2014. The shallow move lower has created three lower highs which formed the descending resistance level of its bearish price channel. A series of lower lows has allowed for the formation of the descending support level of its bearish price channel which is expected to guide this currency pair further to the downside. A breakdown may accelerate the USDCAD down to its intra-day low of 1.1340 which was reached on December 4th 2014 from where the previous move higher originated.
Price action is now drifting lower inside its bearish price channel and additionally trades inside its horizontal resistance level. The USDCAD is anticipated to continue with its current downward trajectory until a breakdown occurs. Binary options traders can take advantage from the breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1.1630 for a risk/reward ratio of 1.0/4.14.
The USDCAD has experienced a trading environment with reduced volatility which is expected to last as long as this currency pair trades inside its bearish price channel. As price action will move further away from its most recent intra-day high and is approaching its descending support level volatility is expected to increases sharply. Buyers will step in and prevent a breakdown from developing while sellers will take the accumulated downward momentum coupled with is bearish chart formation as a platform to launch a breakdown which is expected to accelerate this currency pair further to the downside.
The USDCAD will face its first support area at its descending support level around the 1.1550 mark. This level represents a crucial support level for this currency pair. A breakdown is expected to accelerate the USDCAD down to its intra-day high of 1.1500 which was reached on December 9th 2014. This level has previously reversed a move to the upside. The next support level is located at its intra-day low of 1.1397 which was also reached on December 9th 2014 from where a further breakdown will take the USDCAD to its final support level at its intra-day low of 1.1340 which was recorded on December 4th 2014.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
ISM Manufacturing Index for the month of December:
• Expectations: A reading of 57.5 is expected for the month of December
• Previous Report’s Data: A reading of 58.7 was reported for the month of November
• Impact on the US Dollar: The expected slowdown in the ISM Manufacturing Index is anticipated to exercise downward pressure on the US Dollar which 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:
RBC Manufacturing PMI for the month of December:
• Expectations: A reading of 55.0 is expected for the month of December
• Previous Report’s Data: A reading of 55.3 was reported for the month of November
• Impact on the Canadian Dollar: The anticipated slowdown in the expansion rate reported in the RBC Manufacturing PMI is likely to be overshadowed by the expected slowdown in the US manufacturing sector; this favors binary put options in the USDCAD currency pair