Market Recap & Outlook:
Yesterday represented a rather calm trading day with the exception of Gold which came under heavy selling pressure and retail stops were triggered below 1,120.00 during the Asian trading session. As the European trading session got started, Gold prices stabilized near its lows and a failed move to the upside was reversed. Gold prices are now trading around the key psychological support level of 1,100.00 after yesterday’s trading session took this commodity to an intra-day low of 1,071.50. More volatility should be expected over the course of the trading week.
The Canadian Dollar came under renewed pressure as new economic data released yesterday resulted in more disappointment. Canadian Wholesale Sales dropped by 1.0% in May month-over-month. Economists expected a flat reading after April’s increase of 1.9%. This sufficed to push the USD/CAD to a six-year high with an intra-day high of 1.3024. This currency pair retreated after recording this level and the recent advance could fall victim to profit taking which could reverse the USD/CAD back down to its 50 Day Moving Average (DMA) on the D1 chart around the 1.2420 mark.
Binary Option traders should keep track of price action in the FTSE 100 today as this equity index has started to trade sideways inside of a key horizontal resistance level. Binary option traders who wish to expand their equity index option trading positions will find attractive downside potential in the FTSE 100 with limited upside risk. While the hawkish comments out of the Bank of England have lifted the British Pound it has applied downward pressure on equities. Today’s report in Public Sector Net Borrowing (PSNB) for the month of June is expected to show an increase of £8.7 billion and is likely to impact price action in this equity index.
Today’s Binary Option Trading Recommendations Overview:
• AUD/USD – Binary Call Option
• GBP/JPY – Binary Put Option
• USD/CHF – Binary Put Option
• Gold – Binary Call Option
• FTSE 100 – Binary Put Option
Currency Pairs on today’s Radar Screen:
AUD/USD – The AUD/USD has trended lower after reaching its intra-day high of 0.7488 on July 15th 2015. The move to the downside resulted in the formation of a falling wedge which suggests that a price action reversal may be on the horizon. The 50 Day Moving Average (DMA) is trading below the 200 DMA which continues to apply downward pressure on the AUDUSD. The Accelerator Oscillator (AC) has formed a positive divergence and offers another signal of a potential trend reversal. The Relative Strength Index (RSI) has recovered from oversold territory and is expected to continue its move higher.
Today’s Binary Options Trading Strategy: Call Option
Price action is currently trading inside of its falling wedge formation and just above of its horizontal support level. The AUD/USD is expected to breakout above this bullish chart pattern and advance to the upside. Binary option traders are advised to seek binary call options in the AUD/USD currency pair on dips below 0.7370 on the H1 Hourly Chart. The upside potential for this binary call option is 115 pips to 0.7485 while the downside potential is 40 pips to 0.7330. This results in a risk/reward ratio of 3.83.
GBP/JPY – The GBP/JPY has broken down below its horizontal resistance level after recording an intra-day high of 194.374 on July 17th 2015. After the initial breakdown this currency pair advanced into a lower high with an intra-day high of 193.945 reached yesterday on July 20th 2015 and a descending resistance level formed as a result of this. The 50 DMA has crossed above the 200 DMA which indicates upward momentum. The AC has not confirmed the advance and formed a negative divergence while the RSI is currently trading in neutral territory after a breakdown from extreme overbought territory occurred.
Today’s Binary Options Trading Strategy: Put Option
Price action is now trading just below of its horizontal resistance level which is being enforced by its descending resistance level. The GBP/JPY is anticipated to enter a corrective phase which can take this currency pair back down to its horizontal support level. Binary option traders are advised to seek binary put options in the GBP/JPY currency pair on rallies above 193.500 on the H1 Hourly Chart. The downside potential for this binary put option is 290 pips to 190.600 while the upside potential is 150 pips to 195.000. This results in a risk/reward ratio of 1.93.
USD/CHF – The USD/CHF has enjoyed a strong advance as the US Dollar was bid higher amid hawkish comments out of the US Federal Reserve. The created a narrow rising wedge formation which started to increase downward pressure on this currency pair. The 50 DMA/200 DMA bullish cross has further assisted the move higher, but the AC and RSI show a negative divergence which suggests that more forces are pointing towards a corrective phase rather than a continuation of the advance. The USD/CHF did move away from extreme overbought territory as indicated by the RSI.
Today’s Binary Options Trading Strategy: Put Option
Price action is currently trading inside of its horizontal resistance level as well as its rising wedge formation. The USD/CHF is expected to break down from current levels and accelerate to the downside. Binary option traders are advised to seek binary put options in the USD/CHF currency pair on rallies above 0.9620 on the H1 Hourly Chart. The downside potential for this binary put option is 210 pips to 0.9410 while the upside potential is 80 pips to 0.9700. This results in a risk/reward ratio of 2.63.
Today’s Commodity Trade
Gold – Gold was faced with an avalanche of sell orders as retail stops were triggered below the 1,120.00 mark. A capitulation sell-off low of 1,071.50 was reached yesterday on July 20th 2015 from where this precious metal bounced to the upside. The 50 DMA is trading below its 200 DMA which has increased downward pressure on Gold. The AC is trading essentially flat while the RSI is trading in oversold territory after a breakout from extreme conditions emerged.
Today’s Binary Options Trading Strategy: Call Option
Price action is now trading inside of its horizontal support level from where price action is trying to stabilize. Gold is anticipated to reverse its move to the downside over the next few trading sessions. Binary option traders are advised to seek binary call options in Gold on dips below 1,110.00 on the H1 Hourly Chart. The upside potential for this binary call option is 4,975 pips to 1,159.75 while the downside potential is 1,300 pips to 1,097.00. This results in a risk/reward ratio of 3.83.
Today’s Equity Index Recommendation
FTSE 100 – The FTSE 100 has started to trend sideways inside of its horizontal resistance level after a strong advance took this equity index from its intra-day low of 6,432.50 recorded on July 8th 2015 to its intra-day high of 6,812.50 which was reached yesterday on July 20th 2015. The 50 DMA/200 DMA bullish crossover has supplied additional upward momentum in this equity index. The AC has formed a negative divergence which suggests a potential price action reversal. The RSI has formed a negative divergence as well which concludes trading signals favoring a move to the downside.
Today’s Binary Options Trading Strategy: Put Option
Price action is currently trading inside of its horizontal resistance level from where further upside potential is being challenged. The FTSE 100 is expected to enter a corrective phase after a successful breakdown below its horizontal resistance level. Binary option traders are advised to seek binary put options in the FTSE 100 equity index on rallies above 6,790.00 on the H1 Hourly Chart. The downside potential for this binary put option is 35,500 pips to 6,435.00 while the upside potential is 11,000 pips to 6,900. This results in a risk/reward ratio of 3.23.
Key Fundamental Data:
Australia – Minutes from the last Reserve Bank of Australia meeting indicated that the monetary policy out of the RBA will remain accommodative which translates into no change in monetary policy in the near future as growth has been described as average. The RBA also noted that the sell-off in the Australian Dollar was modest as compared to a basket of currencies.
Japan – Minutes from the last Bank of Japan meeting shows that some voting members think that the effects of the current stimulus plan are fading while the underlying trend in inflation is set to improve. Optimism on achieving the 2.0% inflation target are split.
China – Foreign Direct Investment rose 0.7% in June year-over-year which came in above economists’ expectations for an increase of 0.5%, but is well below the 7.8% increase reported in May.
Switzerland – The Trade Balance for the month of June is expected to show a decrease in the trade surplus to CHF2.50 billion from the trade surplus of CHF3.43 billion which was reported in May.
United Kingdom – Public Sector Net Borrowing is expected to come in at £8.7 billion for the month of June. This represents a slowdown as compared to the £9.4 billion which were reported in the month of May.]
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