Today’s Binary Options Trading Strategy:
• Commodity: Silver
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 17.000
• Upside Potential: The downside potential for this binary put option is 170 pips to 15.300
• Downside Potential: The upside potential for this binary put option is 40 pips to 17.400
Silver has bounced back inside of its horizontal resistance level after a false breakdown, which reached an intra-day low of 16.443 on March 31st 2015, met a steep ascending support level which originated from its intra-day low of 15.286 recorded on March 11th 2015. The move to the downside developed from a false breakout above its horizontal resistance level after a solid advance took this commodity to an intra-day high of 17.402 on March 26th 2015. The formation of a descending resistance level is now applying downward pressure on silver.
Price action is currently trading at the top end of its horizontal resistance level which also houses the intersection between its ascending support level and its descending resistance level. Silver is anticipated to breakdown below its horizontal resistance level as well as its ascending support level and accelerate to the downside. Binary options traders can profit from the expected breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 17.000 for a risk/reward ratio of 1.0/4.25.
Volatility remained contained during the false breakout above its horizontal resistance level as well as its false breakdown below it, but is expected to increase sharply as silver is trapped inside of a triangle formation. Buyers may attempt to force a breakout above its descending resistance level in order to test its intra-day high of 17.402. A breakout above this level is not expected. Sellers are anticipated to pressure this commodity into a breakdown below its ascending support level in order to accelerate back down into its next horizontal support level. This favors binary put options in this commodity.
Silver will face its first support level, after a successful breakdown below its ascending support level as well as its horizontal resistance level, at its intra-day low of 16.443 which was reached on March 31st 2015. This level represents the low recorded during its previous false breakdown. The next support level awaits silver at its intra-day low of 16.072 which was recorded on March 3rd 2015 from where a further breakdown will take this commodity to its intra-day low of 15.610 which was recorded on March 10th 2015. The final support level awaits silver at its intra-day low of 15.286 which was reached on March 11th 2015.
The following economic data out Japan is expected to impact silver:
Preliminary Leading Index and Coincidence Index for the month of February:
• Expectations: A preliminary level of 105.1 is expected in the Leading Index for the month of February, a preliminary level of 110.7 for the Coincidence Index
• Previous Report’s Data: A level of 105.5 in the Leading Index was reported in January, a level of 113.3 in the Coincidence Index
• Impact on silver: The anticipated slowdown in the preliminary Leading Index as well as preliminary Coincident Index is likely to apply downward pressure on Silver which favors binary put options in this commodity
In addition the following economic report out of the eurozone is expected to impact silver:
Eurozone Sentix Investor Confidence for the month of May:
• Expectations: A level of 20.8 is expected for the month of May
• Previous Report’s Data: A level of 18.6 was reported in the month of April
• Impact on silver: The expected increase in Eurozone Sentix Investor Confidence is likely to pressure this commodity to the downside; this favors binary put options in silver