Today’s Binary Options Trading Strategy:
• Currency Pair: USD/CAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.1000
• Upside Potential: The upside potential for this binary call option is 100 pips to 1.1100
• Downside Potential: The downside potential for this binary call option is 50 pips to 1.0950
The USD/CAD is potentially nearing the end of its current move lower after optimism about the Canadian economy may be short-lived and as this currency pair is trading close to a strong double support level. The USD/CAD initiated its current rally after reaching an intra-day low of 1.0811 on August 29th 2014. The reversal of the uptrend can trace its origin to the intra-day high of 1.1099 which it reached on September 15th 2014.
Price action has corrected down and is trading at a double support level; its horizontal support level as well as its ascending support level which is merging into one and expected to provide a solid platform for a move higher. Binary options traders can take advantage from the upward move with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.1000 for a risk/reward ratio of 1.0/2.00.
The USD/CAD is currently in the midst of a breakout above its current horizontal support line and expected to retest its support level before advancing. The USD/CAD initiated the breakout after a false breakdown took this currency pair briefly below the key support level around 1.0950 where a solid horizontal support line experiences upward pressure from the ascending support line. Volatility is also expected to increase after the breakout which could see a move back into the merged support level before a continued upward drift will emerge.
The double support level is expected to prevent a further move to the downside with the next resistance level for the USD/CAD at the 1.1032 level which is an intra-day low reached on September 11th 2014 and represents a level from where move higher gained momentum. A successful breakout will lead the USD/CAD to its intra-day high of 1.1099 where a double top formation could develop.
The following economic data out of the United States is expected to impact the base currency, the US dollar, of the USD/CAD currency pair:
Housing Starts & Building Permits for the month of August:
• Expectations: A monthly decrease of 5.0% in housing starts, a monthly decrease of 1.6% in building permits
• Previous Report’s Data: A monthly increase of 15.7% in housing starts was reported in July, a monthly increase of 8.6% in building permits
• Impact on the US Dollar: Despite the expected monthly decrease in housing starts and building permits the two month trend is strong which favors binary call options in the USD/CAD currency pair
In addition the following economic report out of Canada is expected to impact the quote currency, the Canadian Dollar, of the USD/CAD currency pair:
International Securities Transactions for the month of July:
• Expectations: An increase of C$2.47 billion is expected for the month of July
• Previous Report’s Data: A contraction of C$1.07 billion was reported in June
• Impact on the Canadian dollar: The expected increase in international securities transactions is anticipated to be overshadowed by US housing data; this favors binary call options in the USD/CAD currency pair