February 6th, 2015 5:04am 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 1.2420
• Downside Potential: The downside potential for this binary put option is 620 pips to 1.1800
• Upside Potential: The upside potential for this binary put option is 380 pips to 1.2800
The USDCAD has drifted away from its most recent intra-day high of 1.2799 which was reached on January 30th 2015. The move to the downside recorded an intra-day low of 1.2351 on February 3rd 2015 which marked a false breakdown below its horizontal resistance level. The GBPJPY move back inside this level from where further upside will be challenged. A false breakout may occur, but overall the USDCAD is expected to extend its current drift to the downside until it can challenge its horizontal support level as its steep ascending support level has been breached to the downside.
Price action is now trading inside its horizontal resistance level and below its ascending support level from where upward momentum is fading. The USDCAD is expected to move further to the downside after a sustained breakdown below its horizontal resistance level will materialize. Binary options traders can take advantage from the likely breakdown 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 1.0/1.63.
Volatility has deteriorated during its sharp advance, but started to increase after the false breakdown occurred. Volatility is expected to increase further as buyers and sellers will square off at a crucial support/resistance level. Buyers are anticipated to attempt a reversal of its current move to the downside which is likely to be limited to its most recent intra-day high. Sellers are expected to take the increase in downward momentum as a platform to force a breakdown and accelerate back down to its horizontal support level. This favors binary put options in the USDCAD currency pair.
The USDCAD will face its first support revel at its intra-day low of 1.2351 which was recorded on February 3rd 2015. This level marked the low of the false breakdown prior to the drift higher. A breakdown below this level will take the USDCAD to its intra-day low of 1.2061 which was reached on January 21st 2015. The final support level awaits the USDCAD at its intra-day low of 1.1802 which was reached on January 15th 2015 from where further downside is not expected.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
Non-Farm Payroll Report for the month of January:
• Expectations: An increase of 230,000 jobs is expected for the month of January, an unemployment rate of 5.6%
• Previous Report’s Data: An increase of 252,000 jobs was reported for the month of December, an unemployment rate of 5.6%
• Impact on the US Dollar: The anticipated slowdown in job creation out of the US may suffice to apply 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:
Employment Report for the month of January:
• Expectations: An increase of 5,000 jobs is expected for the month of January, an unemployment rate of 6.7%
• Previous Report’s Data: A contraction of 11,300 jobs was reported for the month of December, an unemployment rate of 6.7%
• Impact on the Canadian Dollar: The expected increase in job creation is likely to pressure the Canadian Dollar to the upside; this favors binary put options in the USDCAD currency pair