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 1.2350
• Upside Potential: The upside potential for this binary call option is 185 pips to 1.2535
• Downside Potential: The downside potential for this binary call option is 100 pips to 1.2250
The EUR/USD has moved strongly to the upside after recording an intra-day low of 1.2247 on December 8th 2014. The move higher carried enough upward momentum to force a breakout above its horizontal resistance level as well as its descending resistance level. The breakout reached an intra-day high of 1.2570 on December 16th 2014 and was aided by much better than expected economic data out of the Eurozone, but could not be sustained and the EUR/USD quickly dropped back below its descending resistance level from where an accelerated move to the downside unfolded.
Price action is now trading at its ascending support level which halted the move to the downside. The EUR/USD is expected to grind higher alongside its ascending support level until it has enough momentum to accelerate higher. Binary options traders can profit 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 1.2350 for a risk/reward ratio of 1.0/1.85.
Volatility has been contained during the move higher, but did increase as a result of the false breakout above its double resistance level and the following accelerated move to the downside. The increase in volatility is likely to remain as the EUR/USD is trading around a crucial support area. Sellers may attempt to use the current downward momentum and force a breakdown below its ascending support level which is likely to be limited to its horizontal support level. Buyers are favored to use the ascending support level as a platform to move to the upside.
The EUR/USD will face its first resistance level at its intra-day low of 1.2370 which was reached on December 11th 2014. This level has halted a previous drift to the downside and pushed this currency pair into its false breakout. The next resistance level awaits the EURUSD at its intra-day high of 1.2477 which was reached yesterday on December 17th 2014. This marked the last time this currency pair ran into its descending resistance level which forced the move to the downside. The final resistance level is located at its intra-day high of 1.2570 which was reached on December 16th 2014.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURUSD currency pair:
German IFO Data for the month of December:
• Expectations: IFO Business Climate at 105.5, IFO Current Assessment at 110.4 and IFO Expectations at 100.5
• Previous Report’s Data: IFO Business Climate was reported at 104.7 in November, IFO Current Assessment at 110.0 and IFO Expectations at 99.7
• Impact on the Euro: The better than expected reading out of the German IFO report could suffice to pressure the Euro to the upside 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:
Philadelphia Federal Reserve Index for the month of December:
• Expectations: A reading of 26.0 is expected for the month of December
• Previous Report’s Data: A reading of 40.8 was reported in the month of November
• Impact on the US Dollar: The expected drop in the Philadelphia Federal Reserve Index is anticipated to apply downward pressure on the US Dollar; this favors binary call options in the EUR/USD currency pair.