June 29th, 2015 4:57 GMT, London UK
Today’s Binary Options Trading Strategy:• Currency Pair: EUR/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 135.700
• Upside Potential: The upside potential for this binary call option is 530 pips to 141.000
• Downside Potential: The downside potential for this binary call option is 190 pips to 133.800
The EUR/JPY has opened this week’s trading session with a gap to the downside after a decision in Greece was taken to hold a referendum. This disappointed the markets and this currency pair dropped sharply. Preceding the unexpected announcement, the EUR/JPY was trading inside of a triangle formation in the middle of its trading range. The top of the range was defined by its intra-day high of 141.025 reached on June 9th 2015 and the bottom of its trading range was limited to its intra-day low of 135.124 which was recorded on June 1st 2015. Binary options trading tools are now favoring the gap to be closed.
Price action is currently trading inside of its horizontal support level after the gap to the downside occurred. The EUR/JPY is expected to close the gap over the next few trading sessions and approach its triangle formation from where more upside is possible. Binary options traders can profit from the anticipated reversal with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 135.700 for a risk/reward ratio of 1.0/2.79.
The EUR/JPY was exposed to a trading environment with reduced volatility as this currency pair was confined to its trading range. Volatility started to increase as price action was trapped inside of its triangle formation and the gap to the downside resulted in a volatility spike. Sellers are expected to push this currency pair further to the downside in order to extend the current move, but a sustained breakdown below its horizontal support level is unlikely. Buyers are favored to reverse the gap to the downside and force an accelerated advance.
The first resistance level awaits the EUR/JPY at its intra-day low of 136.102 which was recorded on June 2nd 2015. This level marks the low of a minor pause in its previous advance. A breakout will take the EUR/JPY to its intra-day low of 137.662 reached on June 25th 2015 which represents the low of its triangle formation from where its ascending support level prevented further downside. The next resistance level is set at its descending resistance level around the 139.20 mark from where a breakout will take the EUR/JPY to its final resistance level located at its intra-day high of 141.025 which was recorded on June 9th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/JPY currency pair:
Eurozone Business Climate Indicator for the month of June:
• Expectations: A level of 103.8 is expected for the month of June
• Previous Report’s Data: A level of 103.8 was reported in the month of May
• Impact on the Euro: The expected reading out of the Eurozone Business Climate Indicator may suffice to apply upward pressure on the Euro which favors binary call options in the EUR/JPY currency pair
In addition the following economic report out Japan already impacted the quote currency, the Japanese Yen, of the EUR/JPY currency pair:
Industrial Production for the month of May:
• Expectations: A monthly contraction of 0.8% was expected for May, an annualized contraction of 2.3%
• Previous Report’s Data: A monthly increase of 1.2% was reported in April, an annualized increase of 0.1%
• Released Data: A monthly contraction of 2.2% was reported for May, an annualized contraction of 4.0%
• Impact on the Japanese Yen: The reported contraction in industrial production has pressured the Japanese Yen to the downside; this favors binary call options in the EUR/JPY currency pair