Today’s Binary Options Trading Strategy:
• Commodity: Silver
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 16.300
• Upside Potential: The upside potential for this binary call option is 100 pips to 17.300
• Downside Potential: The downside potential for this binary call option is 45 pips to 15.850
Silver is recovering from its false breakdown below its horizontal support level which took this commodity to its intra-day low of 15.598 reached on April 24th 2015. Preceding the false breakdown was a corrective phase which emerged from its intra-day high of 17.313 recorded on April 6th 2015. The first reversal ended with an intra-day high of 16.732 which was reached on April 30th 2015. The descending resistance level, which developed from its intra-day high of 17.313, pushed this commodity to a higher low with an intra-day low of 15.815 on April 30th 2015 from where an ascending support level emerged.
Price action is currently trading just outside of its horizontal support level, which is being enforced by its ascending support level, from where downward momentum is being depleted. Silver is anticipated to continue its advance until it reaches its descending resistance level from where more upside is favored. Binary options traders can take advantage of the expected advance with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 16.300 for a risk/reward ratio of 1.0/2.22.
Silver was exposed to a trading environment with reduced volatility during its corrective phase, but the false breakdown below its horizontal support level invited an increase in volatility. Volatility is likely to increase further as price action is trapped inside of a triangle formation. Sellers are anticipated to reverse the current drift to the upside and force a breakdown below its ascending support level; the intra-day low of 15.598 is unlikely to be violated to the downside. Buyers are expected to push Silver into its descending resistance level from where a breakdown is likely to result in an accelerated advance. This favors binary call options in this commodity.
The first resistance level awaits Silver at its descending resistance level around the 16.500 mark. A further increase in volatility is expected around this level as the ascending support level is increasing upward momentum; an intersection with its descending resistance level could spike Silver to the upside. A breakout above this level will take Silver to its psychological resistance level of 17.000. The final resistance level is located at its intra-day high of 17.313 which was reached on April 6th 2015 from where a double top formation may emerge.
The following economic data out of China already impacted Silver:
Final HSBC (LONDON:HSBA) Manufacturing PMI for the month of April:
• Expectations: A final reading of 49.4 was expected for the month of April
• Previous Report’s Data: An initial reading of 49.2 was reported in the month of April
• Released Data: A final reading of 48.9 was reported in the month of April
• Impact on Silver: The final reading in the HSBC Manufacturing PMI out of China pressured Silver to the upside; this favors binary call options in this commodity
In addition the following economic report out of the United States is expected to impact Silver:
New York ISM for the month of April:
• Expectations: A level of 43.1 is expected for the month of April
• Previous Report’s Data: A level of 50.0 was reported in the month of March
• Impact on Silver: The expected slowdown in the New York ISM is likely to apply upward pressure on this commodity which favors binary call options in Silver
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