June 8th, 2015 4:58 GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EUR/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 139.000
• Downside Potential: The downside potential for this binary put option is 590 pips to 133.100
• Upside Potential: The upside potential for this binary put option is 105 pips to 141.050
The EUR/JPY has broken its strong uptrend which took this currency pair from its intra-day low of 133.094 recorded May 26th 2015 to its intra-day high of 141.052 which was reached on June 4th 2015. This intra-day high marked a false breakout above its horizontal resistance level and the move to the upside was supported by its bullish price channel which emerged from its horizontal support level. The ascending support level can trace its origin to its intra-day low of 133.094 while the ascending resistance level originated from its intra-day high of 135.337 recorded on May 22nd 2015.
Price action is now trading inside of its horizontal resistance level as well as inside of a newly formed bearish price channel. The EUR/JPY is anticipated retrace its advance with the help of its bearish chart pattern. Binary options traders can benefit from the expected correction with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 139.000 for a risk/reward ratio of 1.0/5.62.
The EUR/JPY was able to advance with a contraction in volatility, but as the bearish price channel has now intersected its bullish price channel and left this currency pair trading inside of a rhombus formation a sharp increase in volatility is anticipated. Buyers may attempt to push the EUR/JPY to the upside, but the most recent intra-day high is likely to limit any potential advance from current levels. Sellers are favored to successfully force a corrective phase inside of its bearish price channel and binary option traders with access to the best binary option trading platform are expected to profit from the move to the downside.
The first support level awaits the EUR/JPY at its intra-day high of 138.872 which was reached on June 2nd 2015. This level represents the low end of its horizontal resistance level. A breakdown will guide this currency pair down to its intra-day high of 136.957 recorded on May 18th 2015. This level marks the high of a previous advance from where a breakdown will clear the way to its intra-day high of 135.337 which was reached on May 22nd 2015. The final support level is located at its intra-day low of 133.094 recorded on May 26th 2015.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EUR/JPY currency pair:
German Industrial Production for the month of April:
• Expectations: A monthly increase of 0.6% is expected for April, an annualized increase of 0.9%
• Previous Report’s Data: A monthly contraction of 0.5% was reported in March, an annualized increase of 0.1%
• Impact on the Euro: The expected increase in German industrial production may not suffice to apply upward pressure on the Euro which favors binary put options in the EUR/JPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the EUR/JPY currency pair:
Final Gross Domestic Product for the first-quarter of 2015:
• Expectations: A quarterly increase of 0.7% was expected for the first-quarter of 2015, an annualized increase of 2.8%
• Previous Report’s Data: A quarterly increase of 0.6% was initially reported in the first-quarter of 2015, an annualized increase of 2.4%
• Released Data: A quarterly increase of 1.0% was reported for the first-quarter of 2015, an annualized increase of 3.9%
• Impact on the Japanese Yen: The reported upward revision for the first-quarter GDP has pressured the Japanese Yen to the upside; this favors binary put options in the EUR/JPY currency pair