Today’s Binary Options Trading Strategy:
• Commodity: Gold
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1,172.50
• Upside Potential: The upside potential for this binary call option is 5,050 pips to 1,223.00
• Downside Potential: The downside potential for this binary call option is 2,975 pips to 1,142.75
Gold has broken its downtrend after the US Federal Reserve sounded a more dovish tone than expected. The disappointment caused an inflow of capital into gold as traders sought a safe haven. This commodity advanced from its intra-day low of 1,142.72 which was reached on March 17th 2015 to an intra-day high of 1,177.76 recorded on March 19th 2015. The intra-day low is located below its horizontal support level and the intra-day high is located above it. This level is additionally being intersected by its ascending support level as well as by its descending resistance level.
Price action is now trading just outside of its horizontal support level, but below its descending resistance level. Gold may drift back down to the intersection between its ascending support level and descending resistance level from where a breakout is anticipated. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1,172.50 for a risk/reward ratio of 1.0/1.70.
Gold was exposed to a trading environment with decreased volatility after the initial drop from its intra-day high of 1,223.18 which was reached on March 2nd 2015 took this commodity to the top end of its horizontal support level. A bearish price channel formed and further depleted volatility as Gold was guided lower until the price spike occurred. Volatility is expected to further increase as price action is trapped inside of a triangle formation located just above its horizontal support level. Sellers may try to pressure gold to the downside while buyers are likely to complete a breakout above its descending resistance level. This favors binary call options in gold.
The first resistance level awaits Gold at its intra-day high of 1,177.76 which was reached on March 19th 2015. This level marks the high recorded during the price spike and is where the descending resistance level halted a further advance. A breakout above this level will clear the path for Gold to advance to its intra-day low of 1,190.39 which was reached on February 24th 2015. This level represents the low from where this commodity advanced into its intra-day high which initiated the price action reversal. The final resistance level for Gold is located at its intra-day high of 1,223.18 which was reached on March 2nd 2015.
The following economic data out of China already impacted Gold:
Chinese MNI Business Indicator for March:
• Expectations: A level of 52.5 was expected for the month of March
• Previous Report’s Data: A level of 52.8 was reported in the month of February
• Released Data: A level of 52.5 was reported for the month of March
• Impact on Gold: The reported slowdown in the Chinese MNI Business Indicator resulted in an inflow of capital into gold; this favors binary call options in this commodity
In addition the following economic report out of Canada is expected to impact Gold:
Retail Sales for the month of January:
• Expectations: A monthly contraction of 0.8% is expected for January
• Previous Report’s Data: A monthly contraction of 2.0% was reported in December
• Impact on Gold: The expected continuation of contracting retail sales out of Canada is likely to apply upward pressure on this commodity which favors binary call options in Gold