Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/CHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2020
• Upside Potential: The upside potential for this binary call option is 50 pips to 1.2070
• Downside Potential: The downside potential for this binary call option is 20 pips to 1.2000
The EUR/CHF has stopped its move to the downside and formed a new horizontal support level just above the key 1.2000 level at which the Swiss National Bank is expected to sell the Swiss Franc and interfere with the currency market. The EUR/CHF did correct down to an intra-day low of 1.2009 which was reached on November 17th 2014 from its intra-day high of 1.2069 which was reached on October 31st 2014. The EUR/CHF did breakout above its steep descending resistance level, a move which was reversed, but is expected to breakout once more and resume its move to the upside.
Price action may trade sideways inside its horizontal support level until enough upward momentum is present to initiate an upward drift. The EUR/CHF is expected to move higher until it challenges its most recent intra-day high. Binary options traders can take advantage from the anticipated move to the upside with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2020 for a risk/reward ratio of 1.0/2.50.
The EUR/CHF is set to experience an increase in volatility after the breakout above the descending resistance level occurred. The breakout has rendered the resistance level invalid and sellers lost their last opportunity to push this currency pair lower. Buyers are favored to take the strength of the breakout as well as the horizontal support level and the 1.2000 mark at which the Swiss National Bank is rumored to interfere as a solid platform to push the EUR/CHF higher until it challenges its most recent intra-day high of 1.2069.
The EUR/CHF will face its first resistance level at its intra-day high of 1.2026 which represents the intra-day high reached yesterday on November 19th 2014 as a result of the breakout above its descending resistance level which has been reversed. The next resistance level is located at its intra-day high of 1.2038 which was reached on November 12th 2014 from where a breakout will take the EUR/CHF to its intra-day high of 1.2057 which was reached on November 6th 2014. The final resistance level is located at its intra-day high of 1.2069 which was reached on October 31st 2014 from where a double top formation may emerge.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/CHF currency pair:
Eurozone Composite, Manufacturing and Services PMI for the month of November:
• Expectations: Composite PMI at 52.3, Manufacturing PMI at 50.8 and Services PMI at 52.4
• Previous Report’s Data: Composite PMI was reported at 52.1 in October, Manufacturing PMI at 50.6 and Services PMI at 52.3
• Impact on the Euro: The anticipated improvements in the Composite PMI, Manufacturing PMI and Services PMI are expected to push the Euro higher which favors binary call options in the EUR/CHF currency pair
In addition the following economic report out of Switzerland is expected to impact the quote currency, the Swiss Franc, of the EUR/CHF currency pair:
Trade Balance for the month of October:
• Expectations: A trade surplus of CHF2.57 billion is expected for the month of October
• Previous Report’s Data: A trade surplus of CHF2.49 billion was reported in September
• Impact on the Swiss Franc: The expected increase in the trade surplus out of Switzerland is expected to be countered by economic data out of the Eurozone; this favors binary call options in the EUR/CHF currency pair