Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.1350
• Upside Potential: The upside potential for this binary call option is 620 pips to 1.1970
• Downside Potential: The downside potential for this binary call option is 250 pips to 1.1100
The EUR/USD has bounced sharply off of its most recent intra-day low of 1.1097 which was reached on January 26th 2015 and marked a false breakdown below its horizontal support level. A steep ascending support level has applied upward pressure on this currency pair. Prior to the bounce the EUR/USD was exposed to a prolonged move to the downside with the latest part accelerating lower from its intra-day high of 1.2170 which was reached on December 31st 2014. The EUR/USD is likely to resume its current trend higher.
Price action is now trading inside its horizontal support level which is being enforced by its ascending support level. The EUR/USD is expected to breakout above its descending resistance level in order to challenge its next horizontal resistance level. Binary options traders can take advantage from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.1350 for a risk/reward ratio of 1.0/2.48.
The EUR/USD has experienced a sharp contraction in volatility, but price action is now trapped inside a triangle formation which is expected to cause a spike in volatility as buyers and sellers will face off. Sellers will attempt to prevent a breakout in order to force a reversal of the current drift to the upside. Buyers are expected to take advantage of the horizontal support level in order to breakout above its descending resistance level with the increase in upward pressure provided by its ascending support level. This favors binary call options in the EUR/USD currency pair.
The first resistance level awaits the EUR/USD at the intersection between its ascending support level and descending resistance level which is located at 1.1436. A breakout above this crucial level will guide the EUR/USD to its intra-day high of 1.1679 which was reached on January 21st 2015 from where a continuation of the uptrend will take this currency pair to its intra-day high of 1.1871 which was recorded on January 12th 2015. The final resistance level is located at its intra-day high of 1.1976 which was reached on January 5th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/USD currency pair:
German GfK Consumer Confidence Survey for the month of February:
• Expectations: A monthly reading of 9.1 is expected for February
• Previous Report’s Data: A monthly reading of 9.0 was reported in January
• Impact on the Euro: The anticipated increase in consumer confidence out of Germany is likely to apply upward pressure on the Euro which favors binary call options in the EURUSD currency pair
In addition the following economic report out of the United States is expected to impact the quote currency, the US Dollar, of the EUR/USD currency pair:
FOMC Announcement on Interest Rates:
• Expectations: The FOMC is expected to keep interest rates on hold at 0.25% without providing any future guidance on when an increase in rates may be expected; a dovish tone is likely given the recent slowdown in the US economy
• Previous Report’s Data: The FOMC kept interest rates on hold at 0.25% after exiting its QE3 program
• Impact on the US Dollar: The expected dovish tone out of the FOMC may suffice to pressure the US Dollar to the downside; this favors binary call options in the EUR/USD currency pair
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