Today’s Binary Options Trading Strategy:
• Commodity: Gold
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 1,220.00
• Upside Potential: The downside potential for this binary put option is 5,030 pips to 1,169.70
• Downside Potential: The upside potential for this binary put option is 1,815 pips to 1,238.15
Gold has enjoyed a strong move to the upside which reached an intra-day high of 1,227.39 yesterday on May 14th 2015. The advance emerged from its intra-day low of 1,169.68 which was recorded on May 1st 2015 from where its ascending support level originates. The current intra-day high represents a higher high as compared to its previous intra-day high of 1,215.01 which was reached on April 28th 2015. This led to the formation of a new horizontal resistance level. Fundamental factors, such as the disappointment in advanced retail sales out of the United States released on Wednesday or fears over the outcome of the potential exit of Greece from the Eurozone, have spiked this commodity to the upside.
Price action is currently trading inside of its newly formed horizontal resistance level from where further upward momentum is receding. Gold is expected to breakdown from current levels and retrace its advance until it will reach its ascending support level from where a further breakdown is favored. Binary options traders can profit from the anticipated breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 1,220.00 for a risk/reward ratio of 1.0/2.77.
Volatility decreased as Gold enjoyed a strong move to the upside, but a spike in volatility is anticipated as buyers and sellers are set to test the new horizontal resistance level. Buyers are likely to push this commodity to the upside in order to keep the uptrend intact and add to its advance. Sellers are expected to take the stalled price action inside of its horizontal resistance level as a platform to force a price action reversal which can challenge its ascending support level from where a breakdown is likely to occur. This favors binary put options in Gold.
The first support level awaits this commodity at its intra-day high of 1,215.01 which was recorded on April 28th 2015 from where a breakdown will lead Gold to its psychological support level of 1,200.00. A breakdown below this level will take Gold to its ascending support level around the 1,194.70 mark. This level represents a key support level. The next support level is located at its intra-day low of 1,180.10 which was reached on April 24th 2015 from where a breakdown will take Gold to its final support level at its intra-day low of 1,169.68 recorded on May 1st 2015.
The following economic data out of the United States is expected to impact Gold:
Industrial Production & Manufacturing Production for the month of April:
• Expectations: A level of 0.0% is expected in industrial production for the month of April, an increase of 0.2% in manufacturing production
• Previous Report’s Data: A contraction of 0.6% was reported in industrial production for the month of March, an increase of 0.1% in manufacturing production
• Impact on Gold: The expected improvement in industrial production as well as manufacturing production is likely to apply downward pressure on this commodity; this favors binary put options in Gold
In addition the following economic report out of Canada is expected to impact Gold:
Manufacturing Shipments for the month of March:
• Expectations: An increase of 1.0% is expected for the month of March
• Previous Report’s Data: A contraction of 1.7% was reported in the month of February
• Impact on Gold: The anticipated increase in Canadian manufacturing shipments is likely to pressure Gold to the downside which favors binary put options in this commodity
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