EUR/CAD: Experienced A Sharp Drop
GOption | Nov 10, 2014 02:12AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/CAD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.4140
• Upside Potential: The upside potential for this binary call option is 320 pips to 1.4460
• Downside Potential: The downside potential for this binary call option is 140 pips to 1.4000
The EUR/CAD has experienced a sharp drop as this currency pair adjusted to a much better than expected employment report out of Canada. Preceding the new fundamental data the EUR/CAD was already pressured lower by its descending resistance level. The move to the downside was initiated after the EUR/CAD recorded an intra-day high of 1.4500 on October 16th 2014. The push to the downside created an intra-day low of 1.4055 on November 7th 2014. After reaching this intra-day low the EUR/CAD managed to initiate an upward drift.
Price action is now trading around the top its horizontal support level which has previously rallied the EUR/CAD and ended a move to the downside. This horizontal support level is expected to provide enough upward momentum for the EUR/CAD to reverse losses and advance. Binary options traders can profit from the anticipated move to the upside with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.4140 for a risk/reward ratio of 1.0/2.29.
Volatility is expected to increase as buyers and sellers will face off at the current horizontal support level. Sellers will attempt to extend the move to the downside. Given the current strength of the horizontal support level this is unlikely to result in a sustained move. Buyers are expected to use the drift away from its most recent intra-day low and the strength of its horizontal support level as a solid platform for a full price reversal which will challenge it most recent intra-day high after a breakout above its descending resistance level.
The first resistance level awaits the EUR/CAD at its intra-day high of 1.4190 which was reached on November 7th 2014 which has previously stopped a drift higher. The next resistance level is located at its descending resistance level around the 1.4260 mark. A breakout above this level will take the EUR/CAD to its intra-day high of 1.4342 which was reached on November 4th 2014. This level represents the last time price action was reversed by its descending resistance level. The final resistance level is located at its intra-day high of 1.4500 which was reached on October 16th 2014.
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The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/CAD currency pair:
Eurozone Sentix Investor Confidence for the month of November:
• Expectations: A reading of -13.8 is expected for the month of November
• Previous Report’s Data: A reading of -13.7% was reported for the month of October
• Impact on the Euro: The stable reading out of the Eurozone Sentix Investor Confidence Index could suffice in order to provide upward momentum for the Euro; this favors binary call options in the EUR/CAD currency pair
In addition the following economic report out of Canada is expected to impact the quote currency, the Canadian Dollar, of the EUR/CAD currency pair:
Housing Starts for the month of October:
• Expectations: 199,800 housing starts are expected for the month of October
• Previous Report’s Data: 197,300 housing starts were reported for the month of September
• Impact on the Canadian Dollar: The anticipated increase in housing starts out of Canada is unlikely to boost the Canadian Dollar which favors binary call options in the EUR/CAD currency pair
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