October 8th 2014 4:43am GMT, London UK
Today’s Binary Options Trading Strategy:
• Currency Pair: USDJPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 108.300
• Upside Potential: The upside potential for this binary call option is 170 pips to 110.000
• Downside Potential: The downside potential for this binary call option is 115 pips to 107.150
The USDJPY has retreated from its most recent intra-day high of 109.901 which it reached on October 3rd 2014 which was a lower high than the intra-day high of 110.087 reached on October 1st 2014. The preceding rally was initiated from an intra-day low of 106.648 which it reached on September 11th 2014. The Japanese Yen has regained some strength while a wrath of economic disappointments has hit the US Dollar. The USDJPY has now approached a double support level from where it is expected to reverse course once again.
Price action retreated down to a double support level; its ascending support line has merged with its horizontal support line which created a much stronger platform for the USDJPY to reverse its current move lower. Binary options traders can take advantage of the expected move higher with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 108.300 for a risk/reward ratio of 1.0/1.48.
Traders should be prepared for an increase in volatility as sellers will try to use the current downward momentum to their advantage and force a breakdown below solid support levels. Buyers will try to use the double support and attempt to halt the downward move in order to resume the general uptrend in the USDJPY which could lead this currency pair back into its intra-day high of 109.901. Any breakdown below the ascending support line should be considered a better entry opportunity into USDJPY binary call options.
A trend reversal in the USDJPY will take this currency pair to the 109.231 level which is an intra-day high reached yesterday on October 7th 2014 from where the USDJPY was pushed into its double support level. A breakout above this resistance level is expected to take the USDJPY to its intra-day high of 109.901 which it reached on October 3rd 2014 from where a double top formation may emerge.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDJPY currency pair:
Minutes from the Federal Reserve Meeting held between September 16th 2014 and September 17th 2014:
• Expectations: Minutes are expected to confirm that quantitative easing will come to an end and that slack in the labor market continues to persist. Statements on the economy are expected to increase volatility in the US Dollar as are statements on when the US Fed may plan to increase interest rates.
• Impact on the US Dollar: The US Fed may not deliver on interest rates and an end of QE3 is already priced into the US Dollar which could pressure the US currency lower, but weakness in the Japanese Yen is expected to be greater than weakness in the US Dollar; this favors binary call options in the USDJPY currency pair
In addition the following economic report out of Japan is expected to impact the quote currency, the Japanese Yen, of the USDJPY currency pair:
Eco Watchers Survey for the month of September:
• Expectations: Eco-Watchers Current Conditions Index at 48.5, Eco-Watchers Outlook Index at 50.5
• Previous Report’s Data: Eco-Watchers Current Conditions Index at 47.5 in August, Eco-Watchers Outlook Index at 50.4
• Impact on the Japanese Yen: The expected increase in the reading for both the Current Conditions Index and Outlook Index is unlikely to rally the Japanese Yen which favors binary call options in the USDJPY currency pair