Today’s Binary Options Trading Strategy:
• Currency Pair: NZD/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.6730
• Upside Potential: The upside potential for this binary call option is 280 pips to 0.7010
• Downside Potential: The downside potential for this binary call option is 110 pips to 0.6620
The NZD/USD has recovered from its false breakdown below its horizontal support level and its intra-day low of 0.6620 reached on July 7th 2015. This currency pair was guided to the downside by its narrow bearish price channel which emerged after the NZD/USD recorded its intra-day high of 0.7012 on June 17th 2015. The reversal of its false breakdown reached an intra-day high of 0.6771 on July 10th 2015 from where the descending resistance level of its bearish price channel exercised an increase in downward pressure. FX options trading recommendations have been on the rise favoring binary call options in the NZD/USD currency pair.
Price action is currently trading just above of its horizontal support level which is being intersected by its bearish price channel. The NZD/USD is expected to breakout above its descending resistance level from where it can accelerate to the upside. Binary options traders can profit from the anticipated advance with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.6730 for a risk/reward ratio of 1.0/2.55.
The NZD/USD witnessed a decrease in volatility as price action contracted inside of its bearish price channel, but the false breakdown and subsequent reversal have invited a gradual increase in volatility. Binary options traders should expect more volatility ahead as this currency pair is trading inside of its bearish chart pattern and just above of its horizontal support level. Sellers are likely to attempt a breakdown below the ascending support level of its bearish price channel in order to accelerate to the downside. Buyers are favored to successfully force a breakout above its descending resistance level from where this currency pair can advance back into its horizontal resistance level.
The first resistance level, after a successful breakout above its bearish price channel, awaits the NZD/USD at its intra-day high of 0.6771 which was recorded on July 10th 2015. This level marks the high of the reversal after its false breakdown. The next resistance level is located at its intra-day high of 0.6882 reached in June 29th 2015 from where the path is cleared to its intra-day high of 0.6923 which was recorded on June 25th 2015. The last resistance level is set at its intra-day high of 0.7012 reached on June 17th 2015.
The following economic data out of New Zealand already impacted the base currency, the New Zealand Dollar, of the NZD/USD currency pair:
Food Prices for the month of June:
• Expectations: An increase of 0.2% was expected for the month of June
• Previous Announcement: An increase of 0.4% was reported in the month of May
• Released Data: An increase of 0.5% was reported for the month of June
• Impact on the New Zealand Dollar: The reported increase in food prices has pressured the New Zealand Dollar to the upside; this favors binary call options in the NZD/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 NZD/USD currency pair:
Monthly Budget Statement for the month of June:
• Expectations: A budget surplus of $50.0 billion is expected for the month of June
• Previous Report’s Data: A budget deficit of $82.4 billion was reported for the month of May
• Impact on the US Dollar: The expected budget surplus may not suffice to apply upward pressure on the US Dollar which favors binary call options in the NZD/USD currency pair.
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