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USD/JPY AGAIN MAIN FOCUS

BITCOIN 781.950 11:20 03.12
BitCoin/CNY 5382.550 11:20 03.12
BITCOIN 782.045 11:00 03.12
BitCoin/CNY 5383.210 11:00 03.12
BITCOIN 782.136 10:40 03.12
BitCoin/CNY 5383.835 10:40 03.12
BITCOIN 782.186 10:20 03.12
BitCoin/CNY 5384.175 10:20 03.12
BITCOIN 782.498 10:00 03.12
BitCoin/CNY 5386.325 10:00 03.12
BITCOIN 780.288 09:40 03.12
BitCoin/CNY 5371.115 09:40 03.12
BITCOIN 781.315 09:20 03.12
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By: Adam Stone
May 16th 2014 6:35am GMT, London UK
 

In the last few analyses, we’ve focused on the USD/JPY and there has been good reason. The currency pair has been incredibly volatile with an added propensity towards JPY strength. As such, yesterday, we recommended keeping a close eye on the forex pair and it delivered. The FX pair dropped below the support at 101.60 and had a great deal of follow through which took the forex pair to the current level at 101.46. While this may not seem like a monumental shift, after all it’s only 15 pips, you need to understand that this is a relatively large move for the USD/JPY.

We were hoping for more in the way of reversal signals, but not many were to be found for the USD/JPY yesterday. The break strategy was the right play though and the larger trade on the break created the largest potential of low risk profit for the day. Seeing as how such opportunities were in our (and hopefully yours) watch list, it was an easy pick up when the market broke. We actually like the down trend and expect the current support at 101.38 to be tested again later today. It was last tested in the wake of the original break yesterday and failed, allowing reversal strategists to take some quick trades to the upside. Today, although nothing has been in that direction as yet, it can possibly happen if things turn north in the EU session. The reason is, the USD is now facing some upside pressure due to the drop in the NIKKEI overnight. The drop in the USD/JPY, thus increasing the value of the JPY, is partially responsible for the drop in the NIKKEI as the markets begin fretting over the possibility of a weakening export sector in Japan. This is important as the economy has just posted some positive results for the GDP and many expected a strong run for the NIKKEI however, the fickle JPY is posing a serious resistance to such speculation. Without a weaker JPY, it is difficult to imagine a stronger NIKKEI and as such, binary options traders looking for opportunities on the NIKKEI may need to wait some time more before a real break can be seen.

For the day ahead, keep close tabs on the USD/JPY and the 101.38 support level. A break looks unlikely at the moment however it’s very likely to at least be tested. If of course the market turns upwards, just keep looking for a break of the previous support at 101.65. A break will allow binary options traders to take up options with what looks to be the lowest risk trade of the day. Despite the recent break to the downside, the shift can be expected due to a lack of activity to the downside and the resounding drumming that the NIKKEI took last night. In other words, the market needs a break, so take advantage by looking for the upside breaks if and when they come around.

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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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