EUR/USD Binary Call Option: January 22, 2015

Today’s Binary Options Trading Strategy:

• Currency Pair: EUR/USD
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.1620
• Upside Potential: The upside potential for this binary call option is 600 pips to 1.2220
• Downside Potential: The downside potential for this binary call option is 220 pips to 1.1400

The EUR/USD is stabilizing inside its horizontal support level which has formed after its most recent corrective phase has dropped this currency pair to a decade low. After a brief period of stability the EUR/USD accelerated to the downside from its intra-day high of 1.2226 which was reached on December 26th 2014. The downward move reached an intra-day low of 1.1460 on January 16th 2015 from where it drifted to the upside and back inside its horizontal support level.

Price action is expected to trade sideways inside its horizontal support level where downward momentum is likely to deflate. The EUR/USD is expected to breakout and advance until it reaches its next 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 1.1620 for a risk/reward ratio of 1.0/2.73.

The EUR/USD experienced a decrease in volatility during its corrective phase, but has started to increase as this currency pair bounced off of its most recent intra-day low. A further increase in volatility is anticipated as sellers are expected to step in and prevent a further move to the upside in order to keep the downtrend intact. Buyers are favored to take the current drift higher and breakout above its descending resistance level from where an accelerated move higher can develop.

The first resistance level, after a successful breakout above its descending resistance level, awaits the EUR/USD at its intra-day low of 1.1727 which was reached on January 14th 2015. A breakout above this level will take the EUR/USD to its intra-day high of 1.1976 which was reached on January 5th 2015. This level represents the highest mark from a gap to the downside. The final resistance level is located at its intra-day high of 1.2226 which was recorded on December 26th 2014 from where a double top formation is likely to challenge a continuation of the advance.

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The following economic data out of the eurozone is expected to impact the base currency, the euro, of the EUR/USD currency pair:
European Central Bank Rate Announcement:

• Expectations: Interest rate at 0.05%, deposit facility rate at 0.30% and marginal lending facility rate at -0.20%
• Previous Meeting’s Announcement: Interest rate at 0.05%, deposit facility rate at 0.30% and marginal lending facility rate at -0.20%
• Impact on the euro: While no change is expected when it comes to the three main rates, the announcement of a bond buying program much smaller than initially expected is likely to be in focus and impact the euro positively; this favors binary call options in the EUR/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 EUR/USD currency pair:

Initial & Continuing Jobless Claims for the week of January 17th 2015 and January 10th 2015:
• Expectations: Initial jobless claims at 300,000 for the week of January 17th, continuing claims at 2,400,000 for the week of January 10th
• Previous Report’s Data: Initial jobless claims at 316,000, continuing claims at 2,424,000
• Impact on the US dollar: The anticipated decrease in both initial as well as continuing jobless claims is unlikely to suffice to apply upward pressure on the US dollar which favors binary call options in the EUR/USD currency pair