Today’s Binary Options Trading Strategy:
• Currency Pair: GBPCHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.5230
• Upside Potential: The upside potential for this binary call option is 300 pips to 1.5530
• Downside Potential: The downside potential for this binary call option is 100 pips to 1.5130
The GBPCHF has bounced higher after reaching an intra-day low of 1.4992 on October 15th 2014. This intra-day low was formed as economic data of the United Kingdom came in much weaker than expected which caused a full price action reversal. Prior to the reversal the GBPCHF recorded an intra-day high of 1.5535 on October 1st 2014. The current bounce higher ran into the descending resistance line from where a breakout could lead the GBPCHF back into its horizontal resistance level.
Price action has slightly retreated after running into its descending resistance line. The GBPCHF is expected attempt a breakout for more upside potential. Binary options traders can benefit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.5230 for a risk/reward ratio of 1.0/3.00.
The descending resistance line may push the GBPCHF back into its ascending support line which enforces its horizontal support level. Volatility is expected to increase as sellers are likely to use the descending resistance line in order to force a breakdown while buyers are expected to use the double support level as a foundation to attempt a breakout. The double support level is comprised of the ascending support line which merges with the horizontal support level. This favors binary call options in the GBPCHF currency pair.
After a successful breakout the GBPCHF will face its first resistance level at the intra-day high of 1.5317 which it reached on October 10th 2014. A breakout above this level will take the GBPCHF to its intra-day high of 1.5469 which it reached on October 7th 2014. This level has previously accelerated the move lower into its most recent intra-day low. The final resistance level awaits this currency pair at its intra-day high of 1.5535 from where a double top formation may emerge.
The following economic data out of the United Kingdom is expected to impact the base currency, the British Pound, of the GBPCHF currency pair:
Public Sector Net Borrowing for the month of September:
• Expectations: Public sector net borrowing at £9.4 billion for the month of September
• Previous Report’s Data: Public sector net borrowing was reported at £10.9 billion for the month of August
• Impact on the British Pound: The decrease in public sector net borrowing is expected to push to British Pound higher which favors binary call options in the
GBPCHF currency pair
In addition the following economic report out of Switzerland is expected to impact the quote currency, the Swiss Franc, of the GBPCHF currency pair:
Trade Surplus for the month of September:
• Expectations: A trade surplus of CHF2.49 billion is expected for the month of September
• Previous Report’s Data: A trade surplus of CHF1.33 billion was reported in August
• Impact on the Swiss Franc: The anticipated increase in the Swiss trade surplus is expected to be overshadowed by economic data out of the United Kingdom;
this favors binary call options in the GBPCHF currency pair