EUR/USD: Caught In A Corrective Phase

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 1.2250
• Upside Potential: The upside potential for this binary call option is 280 pips to 1.2530
• Downside Potential: The downside potential for this binary call option is 150 pips to 1.2100

The EUR/USD has been caught in a severe corrective phase after it reached its intra-day high of 1.2570 on December 16th 2014. The Euro was pressured lower despite a series of better than expected economic reports out of the Eurozone. Price action is expected to adjust to the data in the coming week. The strong move to the downside recorded an intra-day low of 1.2210 today on December 22nd 2014 from where this currency pair bounced higher. The EUR/USD is expected to reverse its current corrective phase and challenge its most recent intra-day high.

EUR/USD

Price action is now trading inside its horizontal support level where this currency pair has stabilized. The EUR/USD is anticipated to attempt a breakout above its horizontal support level and accelerate to the upside. Binary options traders can profit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2250 for a risk/reward ratio of 1.0/1.87.

The EUR/USD saw volatility decrease with its move to the downside, but is expected to spike as the EUR/USD is trading at a crucial support area. Sellers could attempt to force a breakdown below this area in order to extend the corrective phase and set a lower low. Given the overall better than expected economic data out of the Eurozone a breakdown is unlikely to be sustained and buyers are anticipated to force a price action reversal. This favors binary call options in the EUR/USD currency pair.

The EUR/USD will run into its first resistance level at its intra-day high of 1.2302 which was reached on December 19th 2014. This level has previously halted a move to the upside and pushed this currency pair into its current intra-day low. A breakout above this level will take the EUR/USD into its intra-day low of 1.2370 which was reached on December 11th 2014. The next resistance level awaits the EUR/USD at its descending resistance level around the 1.2440 mark. The final resistance level is located at its intra-day high of 1.2570 which was recorded on December 16th 2014.

The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/USD currency pair:

Eurozone Consumer Confidence for the month of December:

• Expectations: A reading of -11.0 is expected for the month of December
• Previous Report’s Data: A reading of -11.6 was reported in the month of November
• Impact on the Euro: The anticipated improvement in Eurozone consumer confidence is likely to pressure the Euro to the upside which favors binary call options in the EUR/USD 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:

Chicago Federal Reserve National Activity Index for the month of November:

• Expectations: A reading of 0.25 is expected for the month of November
• Previous Report’s Data: A reading of 0.14 was reported for the month of October
• Impact on the US Dollar: The expected increase in the Chicago Federal Reserve National Activity Index is likely to disappoint and follow other regional disappointments which pressured the US Dollar to the downside; this favors binary put options in the EUR/USD currency pair