EUR/CHF: Exposed To Uncertainty Out Of Eurozone
GOption | Oct 30, 2014 06:03AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/CHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2065
• Upside Potential: The upside potential for this binary call option is 70 pips to 1.2135
• Downside Potential: The downside potential for this binary call option is 25 pips to 1.2040
The EUR/CHF has now developed a sideways trend after a move lower took this currency pair from its intra-day high of 1.2139 which it reached on October 7th 2014 to its intra-day low of 1.2053 which it reached on October 27th 2014. The EUR/CHF has been exposed to uncertainty out of the Eurozone which was the reason behind the most recent move lower as well as the preceding move higher. Potential intervention by the Swiss National Bank has placed a floor under the downward move.
Price action continues to trade sideways around its horizontal support area, but the EUR/CHF is expected to gather momentum for a move higher in order to test its most recent intra-day high. Binary options traders can profit from the anticipated move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2065 for a risk/reward ratio of 1.0/2.80.
Volatility has receded during the sideways trend, but is expected to increase as the EUR/CHF attempts a sustained move higher. Buyers as well as sellers have not been able to successfully create a trend and are currently in a low volatility stand-off at its horizontal support level. Given the risk of intervention by the Swiss National Bank and the current level of the EUR/CHF, buyers are expected to gain the upper hand which favors binary call option in the EUR/CHF currency pair.
The next resistance level for the EUR/CHF is located at its intra-day high of 1.2079 which was reached on October 20th 2014 and previously reversed a drift higher into its most recent intra-day low. A breakout above this level will take the EUR/CHF to its intra-day high of 1.2117 which was reached on October 9th 2014 and marked the end of a move higher. The final resistance level awaits the EUR/CHF at its intra-day high of 1.2139 which it reached on October 7th 2014.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/CHF currency pair:
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German Consumer Price Index for the month of October:
• Expectations: A monthly contraction of 0.1%, an annualized increase of 0.9%
• Previous Report’s Data: A monthly reading of 0.0% was reported in September, an annualized increase of 0.8%
• Impact on the Euro: The expected increase in consumer inflation out of Germany, the biggest economy in the Eurozone, should suffice to pressure the Euro higher; this favors binary call options in the EUR/CHF currency pair
In addition the following economic report out of Switzerland is expected to impact the quote currency, the Swiss Franc, of the EUR/CHF currency pair:
KOF Leading Indicator for the month of October:
• Expectations: A reading of 99.2 is expected for the month of October
• Previous Report’s Data: A reading of 99.1 was reported for the month of September
• Impact on the Swiss Franc: The expected increase in the KOF leading indicator may not be strong enough to push the Swiss Franc higher which favors binary call options in the EUR/CHF currency pair
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