Today’s Binary Options Trading Strategy:
• Currency Pair: USDCAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2275
• Upside Potential: The upside potential for this binary call option is 505 pips to 1.2780
• Downside Potential: The downside potential for this binary call option is 195 pips to 1.2080The USDCAD is enjoying a bounce to the upside after a corrective phase took this currency pair from its intra-day high of 1.2669 which was reached on April 10th 2015 to its intra-day low of 1.2087 recorded on April 17th 2015. The intra-day high from where the move to the downside originated represents a lower high as compared to its previous intra-day high of 1.2783 which was reached on March 31st 2015. This allowed for the formation of a descending resistance level. The current intra-day low represents a false breakdown below its horizontal support level from where the reversal emerged.
Price action is now trading back inside of its horizontal support level from where downward momentum is being depleted. The USDCAD is anticipated to drift higher and into its descending resistance level from where a breakout is favored. 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 1.2275 for a risk/reward ratio of 1.0/2.59.
The USDCAD experienced a contraction in volatility during its corrective phase, but an increase in volatility occurred during the bounce off of its most recent intra-day low which is located below its horizontal support level. Volatility is likely to increase further as buyers and sellers are set to face off inside of an important support level. Sellers may step in and try to force another breakdown below its horizontal support level which is not likely to materialize below its current intra-day low. Buyers are anticipated to have enough upward momentum for a breakout above its descending resistance level. This favors binary call options in the USDCAD currency pair.
The first resistance level awaits the USDCAD at its descending resistance level around the 1.2410 mark. This descending resistance level formed as a result of a lower high from where the latest corrective phase emerged. A breakout above this level will take the USDCAD to its intra-day high of 1.2669 which was recorded on April 10th 2015. The final resistance level is located at its intra-day high of 1.2783 reached on March 31st 2015 from where a double top formation is expected to limit further upside potential.
There is no economic data out of the United States expected to impact the base currency, the US Dollar, of the USDCAD currency pair:
The US Dollar will be influenced by technical aspects during today’s trading session:
• Expectations: The most recent corrective phase took the USDCAD into oversold territory from where an extension without a counter-trend move preceding it is very unlikely given the current technical environment
• Impact on the US Dollar: The absence of fundamental factors allows the US Dollar to be exposed to pure price action which is likely to apply upward pressure on this currency; this favors binary call options in the USDCAD currency pair
In addition the following economic report out of Canada is expected to impact the quote currency, the Canadian Dollar, of the USDCAD currency pair:
Wholesale Sales for the month of February:
• Expectations: A monthly increase of 0.5% is expected for February
• Previous Report’s Data: A monthly contraction of 3.1% was reported in January
• Impact on the Canadian Dollar: The expected increase in Canadian wholesale sales is unlikely to pressure the Canadian Dollar to the upside which favors binary call options in the USDCAD currency pair