Today’s Binary Options Trading Strategy:
• Currency Pair: EURCHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1.2100
• Downside Potential: The downside potential for this binary put option is 55 pips to 1.2045
• Upside Potential: The upside potential for this binary put option is 25 pips to 1.2125
The EURCHF currency pair is currently stuck in a horizontal chart pattern which is not likely to be violated as price action is expected to remain confined to its horizontal resistance line to the upside and horizontal support line to the downside. The EURCHF has set an intra-day high of 1.2118 on September 10th 2014 and an intra-day low of 1.2027 on September 7th 2014. The EURCHF is expected to reverse back down to support after flirting with its resistance line.
Price action is expected to move lower as two resistance levels, one horizontal resistance line and one descending resistance line, are exercising downward pressure on the EURCHF. Binary options traders can profit from the anticipated trend reversal with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1.2100 for a risk/reward ratio of 1.0/2.20.
Traders should be prepared for an increase in volatile as two key resistance levels merges into one which may overpower any remaining buyers in the EURCHF. Last week a false breakout occurred which was quickly reversed and a set of lower highs was formed. Buyers attempted to force another breakout, but failed at the descending resistance line which further supports a binary put option in the EURCHF currency pair.
The first support level for the expected correction from the horizontal resistance line to the horizontal support is located at 1.2072 which is an intra-day low reached on August 25th 2014 and represents a strong support as well as resistance level which has been tested multiple to both the upside and downside. A successful breakdown will take the EURCHF to the 1.2045 level which is an intra-day low reached on September 4th 2014 and where a double bottom would emerge.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURCHF currency pair:
Eurozone Trade Balance for the month of July:
• Expectations: An decrease in the trade surplus out of the Eurozone is expected below June’s trade surplus of €16.8 billion to €15.9 billion
• Previous Month’s Data: A trade surplus of €16.8 billion was reported in June
• Impact on the Euro: The decrease in the Eurozone trade surplus could exercise downward pressure on the Euro which favors binary put options in the EURCHF currency pair
In addition the following economic report out of Switzerland is expected to impact the quote currency, the Swiss Franc, of the EURCHF currency pair:
Producer & Import Prices for the month of August:
• Expectations: A monthly increase of 0.2%, an annualized contraction of 1.0%
• Previous Month’s Data: A monthly reading of 0.0% was reported in June, an annualized contraction of 0.8%
• Impact on the Swiss Franc: The expected slight increase in inflation out of Switzerland should rally the Swiss Franc which favors binary put options in the EURCHF currency pair