October 22nd 2014 6:00am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: EURJPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 135.750
• Upside Potential: The upside potential for this binary call option is 325 pips to 139.000
• Downside Potential: The downside potential for this binary call option is 175 pips to 134.000
The EURJPY continued to move lower inside its bearish price channel. The descending resistance line originated from its intra-day high of 139.129 which it reached on September 29th 2014. The descending support line can be traced back to an intra-day low of 136.952 which it reached on October 2nd 2014. The move lower did experience a false breakdown below its bearish price channel for an intra-day low of 134.136 which it reached on October 16th 2014. The EURJPY quickly bounced higher and back into its descending resistance line.
Price action has now retreated from its descending resistance line and into a newly formed ascending support line which was created after a series of two higher lows was formed. The EURJPY is expected to attempt a breakout above its bearish price channel. Binary options traders can take advantage from the expected breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 135.750 for a risk/reward ratio of 1.0/1.86.
The EURJPY is trapped inside a triangle formation which is expected to increase volatility in this currency pair. Sellers will try to keep the downward momentum alive and the bearish price channel intact. The ascending support line has merged with its horizontal support level and created a strong platform which buyers are expected to use in order to launch a breakout above its bearish chart formation. This favors binary call options in the EURJPY currency pair.
A successful breakout above the bearish price channel will meet resistance at the intra-day high of 136.602 which the EURJPY reached on October 20th 2014. This represents a level which previously reversed a breakout attempt. The next resistance level is located at the intra-day high of 137.936 which was reached on October 8th 2014. This level has also reversed a previous breakout attempt. The EURJPY will face its final resistance level and the intra-day high of 139.129 which it reached on September 29th 2014 and from where a double top formation is possible.
The following economic data out of the Eurozone is expected to impact the base currency, the Euro, of the EURJPY currency pair:
Eurozone PMI Data for the month of October:
• Expectations: Eurozone Composite PMI at 51.5, Eurozone Manufacturing PMI at 49.9 and the Eurozone Services PMI at 52.0
• Previous Report’s Data: Eurozone Composite PMI at 52.0 in September, Eurozone Manufacturing PMI at 50.3 and the Eurozone Services PMI at 52.4
• Impact on the Euro: The anticipated slowdown in the Eurozone is priced into the Euro which allows for a positive surprise; this favors binary call options in the EURJPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the EURJPY currency pair:
Markit/JMMA Manufacturing PMI for the month of October:
• Expectations: Japanese Markit/JMMA Manufacturing PMI at 51.7 for October
• Previous Report’s Data: Japanese Markit/JMMA Manufacturing PMI was at 51.7 in September
• Released Data: Japanese Markit/JMMA Manufacturing PMI came in at 52.8
• Impact on the Japanese Yen: The higher than expected growth rate in the Japanese manufacturing sector failed to rally the Japanese Yen which favors binary call options in the EURJPY currency pair