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 1.2440 • Upside Potential: The upside potential for this binary call option is 355 pips to 1.2795 • Downside Potential: The downside potential for this binary call option is 140 pips to 1.2300. The USD/CAD has retreated sharply after reaching an intra-day high of 1.2663 on February 24th 2015; this level is where the descending resistance level exercised downward pressure on this currency pair. The move came after Bank of Canada Governor Poloz spoke in London, Ontario. The move to the downside was halted by its ascending support level which formed due to the intra-day low of 1.2400 which was reached yesterday on February 25th 2015. The USD/CAD is now trapped inside a triangle formation from where a move to the upside is favored.
USDCAD 4-Hour Chart
Price action is currently trading at the top its horizontal support level as downward pressure is fading away. The USD/CAD is expected to trend sideways until the ascending support level will accelerate this currency pair to the upside. Binary options traders can take advantage from the anticipated advance with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2440 for a risk/reward ratio of 1.0/2.54.
The USD/CAD enjoyed a trading environment will low volatility during its move to the downside, but as price action has reversed down to its ascending support level, which is enforcing its horizontal support level, an increase in volatility should be accounted for. Sellers may attempt to take the existing downward momentum and force a breakdown below its enforced horizontal support area; this is not likely to extend below its current intra-day low. Buyers are expected to take advantage of this enforced support level and accelerate to the upside. This favors binary call options in the USD/CAD currency pair.
The first resistance level awaits the USD/CAD at its intra-day high of 1.2554 which was reached on February 19th 2015. This level marked the high of a previous drift to the upside. A breakout above this level will take the USD/CAD to its descending resistance around the 1.2610 mark from where a further breakout will clear the way to its intra-day high of 1.2697 which was recorded on February 11th 2015. The final resistance level is located at its intra-day high of 1.2799 which was reached on January 30th 2015 from where the descending resistance level originates.
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: Consumer Price Index for the month of January: • Expectations: A contraction of 0.6% is expected for the month of January, an annualized contraction of 0.1% • Previous Report’s Data: A contraction of 0.3% was reported for the month of December, an annualized increase of 0.8% • Impact on the US dollar: The expected deflationary reading out of the US CPI is likely to apply downward pressure on the US Dollar which favors binary call options in the USD/CAD currency pair
In addition the following economic report out Canada is expected to impact the quote currency, the Canadian dollar, of the USD/CAD currency pair: Consumer Price Index for the month of January: • Expectations: A monthly contraction of 0.4% is expected for January, an annualized increase of 0.8% • Previous Report’s Data: A monthly contraction of 0.7% was reported in December, an annualized increase of 1.5% • Impact on the Canadian dollar: The anticipated slowdown in the annualized CPI out of Canada is likely to be overshadowed by the deflationary reading expected out of the US CPI; this favors binary call options in the USD/CAD currency pair