Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/GBP
• Time Frame: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 0.7200
• Downside Potential: The downside potential for this binary put option is 210 pips to 0.6990
• Upside Potential: The upside potential for this binary put option is 115 pips to 0.7315
The EUR/GBP has recovered from its corrective phase which took this currency pair from its intra-day high of 0.7315 reached on June 11th 2015 to its intra-day low of 0.6987 which was recorded on June 29th 2015. The move to the downside was fueled by the uncertainty surrounding Greece which had a negative impact on the Euro. After the Greek referendum was held, a momentum shift occurred and the EURGBP partially reversed its course until it reached its current intra-day high of 0.7224 yesterday on July 8th 2015 where its descending resistance level halted the advance.
Price action is now trading inside of its horizontal resistance level which is being enforced by its descending resistance level. The EURGBP is anticipated to accelerate to the downside in order to challenge its most recent intra-day low. Binary options traders can benefit from the expected contraction with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 0.7200 for a risk/reward ratio of 1.0/1.83.
Volatility contracted as the EURGBP was exposed to its corrective phase, but binary options traders who plan on adding binary put options to their option trading account should be prepared for a spike in volatility as this currency pair is trading inside of a triangle formation. Buyers may attempt a breakout above its enforced resistance level in order to extend the recovery while sellers are favored to take the increase in downward pressure from its descending resistance level as a platform to force more downside and push the EUR/GBP back into its horizontal support level.
The EURGBP will face its first support level at its ascending support level, which originated at its intra-day low of 0.6987, around the 0.7140 mark. Volatility is expected to increase further as this represents a key support level. A breakdown below it will take the EURGBP to its intra-day low of 0.7060 which was recorded on July 7th 2015. This level marks the last time the ascending support level reversed a drift to the downside. The final support level awaits the EURGBP at its intra-day low of 0.6987 reached on June 29th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/GBP currency pair:
German Trade Balance for the month of May:
• Expectations: A trade surplus of €20.5 billion is expected for the month of May
• Previous Report’s Data: A trade surplus of €21.8 billion was reported in the month of April
• Impact on the Euro: The anticipated slowdown in the German trade surplus is likely to pressure the Euro to the downside;this favors binary put options in the EURGBP currency pair
In addition the following economic report out of the United Kingdom is expected to impact the quote currency, the British Pound, of the EURGBP currency pair:
Bank of England Interest Rate Announcement & Asset Purchase Target:
• Expectations: Interest rates unchanged at 0.50%, Asset Purchase Target unchanged at £375 billion
• Previous Report’s Data: No change in interest rates at 0.50%, no change in the Asset Purchase Target at £375 billion
• Impact on the British Pound: The statement which will accompany the announcement may suffice to apply upward pressure on the British Pound whichfavors binary put options in the EURGBP currency pair
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