Have you ever seen a map of a river? how it meanders all over the place, seemingly without direction, and then takes a path of continuation ? That’s how money moves.
The crucial thing to understand about binary options trading is that it is not helpful to be right about the direction of a commodity or currency pair price action beyond the life time of the option on which you are placing your risk. If you are trading based on market action within a given day, the price may go up or down on that day, against the larger trend, and still be in step with the prevailing trend on a longer time frame. People see this and they get upset, but winners are the people who see these hiccups for what they are: Opportunities to join the larger trend.
If you are trading on a daily basis, the five minute candlestick chart is your primary tool to indicate the direction of the day; but keep a wether eye on the hourly and 4 hour candlestick charts too. If you are trading on an hourly basis, you want to look at the one and three minute candlestick charts. It does not matter whether you are trading gold, or oil, or the EUR/USD–the same principles apply.
For the EUR/USD, the mid June 2012 swing high prices @ the 1.2740 is significant because 1.2740 is the 38.2% Fibonacci retracement point between the 2012 swing low (@ 1.2041) and the September 13, 2012 high, @ 1.2986. The EUR/USD broke below that level on the afternoon of Friday, November 9, 2012. EUR/USD 1.2740 withstood two subsequent assaults from below; first, on Monday, November 11, and again during the Tuesday, November 12 London session. Price is now hovering on the north side of that 1.27 figure, sitting on its own 21 by one hour exponential moving average, which indicates a bullish bias during this upcoming Asian session; but what the chart is telling us is although short term bias is up, this 38.2% retracement line @ 1.2740 combined with 4 hour candlestick 34 exponential moving average @ 1.2744 is now overhead resistance. Unless Greece gets a bailout, those overhead downsloping 4 hour candlestick exponential moving averages are going to continue to force price down in a clean, tradeable manner.
EUR/USD 1.2781 levels now supplies overhead resistance for this confirmed medium term downtrend. The weekly central pivot point should supply formidable resistance if things start looking up.
The bull case is: The buying pressure during the London session was caused by a report that Greece might get a 45 billion Euro loan. The EUR/USD chart supplies a strong hesitation signal, as the New York trade session appears to be closing with a doji candlestick @ 1.27, after a retracement from the double top highs which we saw on September 13 and October 16, 2012. How do you translate that into money? Do a Fibonacci study of the price action from the London low (1.2659) to the New York session high (@ 1.2727) at 7:30 AM, and you will find support levels @ 1.2701 and 1.2684. These are high probability entry points for short term call trades.