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By: Adam Stone
January 22nd 2014 6:25am GMT, London UK

Binary options traders awake to a new day with mixed emotions about the topsy turvy nature of the markets. With US indices all over the place and the USD jumping all over the JPY, things are just a little confusing for the casual trader. Does the fact that the USD seem to have great momentum and provided a massive break pattern yesterday mean that the USD can make a move agains the EUR? This and many other questions arise.

For starters, binary options traders looking for opportunities in index trading were hard pressed to find much to rely on. The S&P, while rising slightly, didn’t have the impetus necessary blow past any meaningful resistances. Add to this tepid behavior a downward moving DOW JONES index. It is rare that one US stock index rises while another falls, but that is precisely the type of inconsistent behavior we try to avoid in this analysis. This is why yesterday, we explained the point of looking at forex pairs like the USD/JPY. The forex pair made the move we waited for. That analysis pointed towards the resistance at 104.4. While this occurred just moments ago, those trades who kept this asset in their watch list made money, while those that did not, well, didn’t.

104.5 is the new resistance level of importance and binary options traders will do well to keep a firm grip of the mouse button in the coming hours. It seems that volatile price action is what to expect. The USD, albeit agains the EUR, has just fallen hard by over 50 points and is now trading near 1.3620.

According to investing.com, the spike in price action was attributed to the Bank of Japan (BoJ) decision to leave monetary policy as is with no change. The BoJ voted unanimously to keep its policy target unchanged, but stopped saying there is “a high degree of uncertainty concerning Japan’s economy,” pointing to a slow pickup in emerging and other economies as a threat to sustained domestic growth.

The fact that these spikes keep happening should concern binary options traders. After all, such large moves are usually not conducive to low risk trading, especially not on forex pairs. But note how the BoJ’s announcement had nary an effect on the price action of the actual USD/JPY pair while the EUR/USD totally flipped out. It’s interesting to note such behavioral and characteristically differences in currency pairs. To assume that all currencies are created equal and will all react in similar if not identical moves, you’d be horribly wrong. This is a perfect example of such divergences. Many such differences arise in the perception of the market of such events.

More news is set for release later today with the Brits set to release their unemployment figures (claimant count) and the MPC is going to provide its meeting minutes at 9:30 GMT.

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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