Today’s Binary Options Trading Strategy:
• Currency Pair: USD/CHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 0.9470
• Upside Potential: The upside potential for this binary call option is 220 pips to 0.9690
• Downside Potential: The downside potential for this binary call option is 110 pips to 0.9360
The USD/CHF has experienced a strong price action reversal after reaching an intra-day high of 0.9687 on October 6th 2014. A series of economic disappointments out of the United States have pressured this currency pair lower until it reached an intra-day low of 0.9360 on October 15th 2014. After dropping to its intra-day low, which also marked a false breakdown below its current horizontal support level, the USD/CHF managed to bounce higher and is now attempting a breakout.
Price action is now trading at a crucial level and the expected breakout is likely to mature into a bigger price action reversal which will challenge its ascending resistance level for more upside potential. Binary options traders can benefit from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 0.9470 for a risk/reward ratio of 1.0/2.00.
The breakout and subsequent move higher is likely to be accompanied by an increase in volatility as sellers seek to extend the move lower and attempt a second breakdown. At the same time buyers are expected to hold firm and use the current horizontal support level as a platform to reverse price action and move higher until a potential double top formation, a bearish chart pattern, will be formed. The way to a double top formation will be challenged by two ascending resistance lines which are expected to give in due to the accumulated upward momentum in the USD/CHF.
The first resistance awaits the USD/CHF at the 0.9491 level which is an intra-day low reached on October 16th 2014 which is also where the descending resistance line is expected to exercise downward pressure on this currency pair. A breakout above this level will take the USDCHF to its ascending resistance level which is located around the 0.9565 level. The final resistance level on the way to the expected double top is located at the intra-day high of 0.9593 which it reached on October 10th 2014.
There is no economic data out of the United States expected which can impact the base currency, the US Dollar, of the USD/CHF currency pair. This will allow price action to resume its bounce off of its most recent intra-day low which favors binary call options in the USD/CHF currency pair.
In addition there is no economic report which will be released out of Switzerland which can impact the quote currency, the Swiss Franc, of the USD/CHF currency pair. Given that there are more positive pressures acting on the US Dollar to move higher than there are on the Swiss Franc to move higher the absence of economic reports out of Switzerland further favors binary call options in the USD/CHF currency pair.