AUD/USD: Enjoying An Upward Drift
GOption | Oct 22, 2014 04:54AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: AUD/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 0.8800
• Downside Potential: The downside potential for this binary put option is 145 pips to 0.8655
• Upside Potential: The upside potential for this binary put option is 95 pips to 0.8895
The AUD/USD has enjoyed an upward drift after a sharp drop from its intra-day high of 0.8898 which it reached on October 9th 2014 and took this currency pair to and intra-day low of 0.8651 which it reached on October 13th 2014. The upward drift resulted from a serious of three lower highs which formed an ascending support line. The AUD/USD is now trading around its descending resistance line which has dissected its horizontal resistance line and is expected to apply downward pressure on the AUD/USD currency pair.
Price action is currently struggling with its descending resistance line which has the AUD/USD trapped inside a triangle formation. Downward pressures are expected to be strong enough to force a breakdown and take this currency pair to its next horizontal support level. 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 0.8800 for a risk/reward ratio of 1.0/1.53.
The triangle formation which has price action confined to the area inside its descending resistance line and its ascending support line is likely to result in an increasing volatility. Buyers will struggle with the double resistance level comprised by the merger between its horizontal resistance line and its descending resistance line. Sellers are expected to capitalize from current resistance levels and force a reversal back down to its ascending support line from where a breakout will take the AUD/USD to its horizontal support line.
Before the AUD/USD will reach its ascending support line it will face a minor support level at the intra-day low of 0.8733 which it reached on October 17th 2014. This level represents an area will support which pushed the AUD/USD into its descending resistance line. The breakdown below this level will take this current pair into its ascending support line. The final support level is located at the intra-day low of 0.8651 which was reached on October 13th 2014.
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The following economic data out of Australia already impacted the base currency, the Australian Dollar, of the AUD/USD currency pair:
Consumer Price Index for the third-quarter of 2014:
• Expectations: A quarterly increase of 0.4%, an annualized increase of 2.3%
• Previous Report’s Data: A quarterly increase of 0.5% was reported in the second-quarter, an annualized increase of 3.0%
• Released Data: A quarterly increase of 0.5% was reported for the third-quarter, an annualized increase of 2.3%
• Impact on the Australian Dollar: The slowdown in annualized consumer inflation has pressured the Australian Dollar lower; this favors binary put options in the AUD/USD currency pair
In addition the following economic report out of the United States is expected to impact the quote currency, the US dollar, of the AUD/USD currency pair:
Consumer Price Index for the month of September:
• Expectations: A monthly reading of 0.0%, an annualized increase of 1.6%
• Previous Report’s Data: A monthly contraction of 0.2% was reported in August, an annualized increase of 1.7%
• Impact on the US Dollar: The annualized slowdown in consumer inflation is expected to exercise downward pressure on the US Dollar which favors binary put options in the AUD/USD currency pair
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