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 1.2500 • Upside Potential: The upside potential for this binary call option is 280 pips to 1.2780 • Downside Potential: The downside potential for this binary call option is 110 pips to 1.2390
The USD/CAD has completed its corrective move which developed from its intra-day high of 1.2783 recorded on March 31st 2015. This level represents a lower high as compared to its previous intra-day high of 1.2835 which was reached on March 18th 2015. A descending resistance level formed as a result of this. The move to the downside took the USDCAD to an intra-day low of 1.2387 which was reached on April 8th 2015 from where a reversal took place and lifted this currency pair to an intra-day high of 1.2669 reached on April 10th 2015. The descending resistance level halted the advance and pushed the USD/CAD back to the downside.
USD/CAD Support And Resistance
Price action is currently trading back inside of its horizontal support level which is being enforced by its ascending support level. The USD/CAD is expected to breakout above its descending resistance level and accelerate into its horizontal resistance level. Binary options traders can take advantage from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2500 for a risk/reward ratio of 1.0/2.55.
The USD/CAD was exposed to a trading environment with decreased volatility during its corrective move away from its horizontal resistance level, but an increase in volatility took place during the bounce off of its intra-day low which is located below its horizontal support level. A further increase in volatility is expected as the USDCAD is trapped inside of a triangle formation. Sellers are expected to attempt a breakdown below its enforced support level which is unlikely to materialize below its most recent intra-day low. Buyers are anticipated to successfully force a breakout and move to the upside. This favors binary call options in the USD/CAD currency pair.
The first resistance level awaits the USD/CAD at its descending resistance level around the 1.2595 mark. This resistance level has reversed price action on two different occasions. A breakout above this level will take the USD/CAD to its intra-day high of 1.2669 which was reached on April 10th 2015. The final resistance level is located at its intra-day high of 1.2783, recorded on March 31st 2015, and inside of its horizontal resistance level.
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: NAHB Housing Market Index for the month of April: • Expectations: A level of 55 is expected for the month of April • Previous Announcement: A level of 53 was reported in the month of March • Impact on the US dollar: The expected increase in the NAHB Housing Market Index is likely to apply upward pressure on the US dollar 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: Bank of Canada Interest Rate Decision: • Expectations: An interest rate of 0.75% • Previous Announcement: An interest rate of 0.75% • Impact on the Canadian dollar: While the interest rate is expected to remain unchanged, the announcement during the following press conference is likely to apply downward pressure on the Canadian dollar; this favors binary call options in the USD/CAD currency pair