March 13th, 2015 5:15am 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 1.2700
• Downside Potential: The downside potential for this binary put option is 250 pips to 1.2450
• Upside Potential: The upside potential for this binary put option is 100 pips to 1.2800The USDCAD has advanced sharply after reaching an intra-day low of 1.2362 on February 17th 2015. The initial move to the upside took this currency pair to its intra-day high of 1.2663 which was reached on February 24th 2015 from where price action reversed down to record a higher low with an intra-day low of 1.2387 on February 26th 2015. The USDCAD then accelerated to its most recent intra-day high of 1.2797 which was recorded on March 11th 2015. This marked a false breakout above its horizontal resistance level which was quickly reversed into a false breakdown.
Price action has now recovered from its false breakdown and is trading back inside of its horizontal resistance level. The USDCAD is anticipated to once again breakdown and accelerate back inside of its horizontal support level. 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 1.2700 for a risk/reward ratio of 1.0/2.50.
Volatility decreased during the advance from its intra-day low, but experienced a gradual increase as the USDCAD first mounted a false breakout above its horizontal resistance level followed by a false breakdown. A further increase in volatility is expected as buyers and sellers will test its horizontal resistance level. Buyers may attempt to force another breakout which is likely to be limited to its most recent intra-day high. Sellers are anticipated to successfully breakdown and extend a counter-trend move back down to its horizontal support level. This favors binary put options in the USDCAD currency pair.
The USDCAD will face its first support level at its intra-day low of 1.2616 which was recorded yesterday on March 12th 2015. This marked the low reached during its false breakdown below its horizontal resistance level. A breakdown below this level will take the USDCAD to its intra-day high of 1.2565 which was reached on March 2nd 2015. This level represents a high reached during a drift away from its intra-day low. The final support level is located at its ascending support level around the 1.2445 mark.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
University of Michigan Consumer Confidence for the month of March:
• Expectations: A level of 95.7 is expected for the month of March
• Previous Report’s Data: A level of 95.4 was reported for the month of February
• Impact on the US Dollar: Given recent economic disappointments out of the United States today’s consumer confidence report is anticipated to disappoint and apply downward pressure on the US Dollar; this favors binary put options in the USDCAD currency pair
In addition the following economic report out Canada is expected to impact the quote currency, the Canadian Dollar, of the USDCAD currency pair:
Employment Report for the month of February:
• Expectations: The loss of 5,000 jobs is expected for the month of February, an unemployment rate of 6.7%
• Previous Report’s Data: An increase of 35,400 jobs was reported in the month of January, an unemployment rate of 6.6%
• Impact on the Canadian Dollar: The expected job losses for February are likely to be overshadowed by the solid employment report in the previous month and suffice to pressure the Canadian Dollar to the upside which favors binary put options in the USDCAD currency pair