EUR/CHF: Today's Strategy
GOption | Nov 27, 2014 02:31AM ET
• Currency Pair: EUR/CHF
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 1.2020
• Upside Potential: The upside potential for this binary call option is 50 pips to 1.2070
• Downside Potential: The downside potential for this binary call option is 20 pips to 1.2000
The EUR/CHF has attempted to breakout above its tight trading range after it halted its downward move with an intra-day low of 1.2009 reached on November 19th 2014. Preceding this intra-day low was an intra-day high of 1.2068 which was reached on October 31st 2014. The EUR/CHF enjoyed a swift move higher which reached an intra-day high of 1.2033 on November 25th 2014 before reversing to the downside. This move allowed for the creation of a descending resistance level and left the EUR/CHF trapped inside a triangle formation.
Price action is now trading inside this triangle formation from where pressures are building for this currency pair to stage its next extended move. The EUR/CHF is expected to breakout above its triangle formation given the threat of intervention by the Swiss National Bank. Binary options traders can benefit from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 1.2020 for a risk/reward ratio of 1.0/2.50.
A spike in volatility is expected as pressures are building up inside the triangle formation for the EUR/CHF to either breakdown below its ascending support level and extend its move to the downside or to breakout above its descending resistance level and accelerate to the upside. Given the threat of central bank intervention by the Swiss National Bank the EUR/CHF is expected to breakout and challenge its intra-day high of 1.2068 which was reached on October 31st 2014. This favors binary call options in the EUR/CHF currency pair.
The first resistance level awaits the EUR/CHF at its intra-day high of 1.2033 which was reached on November 25th 2014. This level represents the intra-day high reached during the previous move to the upside. A breakout above this level will take this currency pair to its intra-day high of 1.2057 which was reached on November 6th 2014. The final resistance level is located at its intra-day high of 1.2068 which was reached on October 31st 2014 from where a double top formation may hinder a further acceleration to the upside.
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The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/CHF currency pair:
Eurozone Economic Confidence, Industrial Confidence and Services Confidence for the month of November:
• Expectations: Economic Confidence at 100.3, Industrial Confidence at -5.5 and Services Confidence at 4.0
• Previous Report’s Data: Economic Confidence was reported at 100.7 in October, Industrial Confidence at -5.1 and Services Confidence at 4.4
• Impact on the Euro: The expected slowdown in confidence data out of the Eurozone is likely to be overshadowed by economic data out of Switzerland; 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:
Annualized Industrial Production for the third-quarter of 2014:
• Expectations: An annualized increase of 2.6% is expected for the third-quarter
• Previous Report’s Data: An annualized increase of 3.1% was reported in the second-quarter
• Impact on the Swiss Franc: The anticipated slowdown in annualized industrial production for the third-quarter is expected pressure the Swiss Franc to the downside which favors binary call options in the EUR/CHF currency pair
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