December 10, 2014 5:30am 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 119.000
• Upside Potential: The upside potential for this binary call option is 280 pips to 121.800
• Downside Potential: The downside potential for this binary call option is 110 pips to 117.900
The USDJPY has pulled away from its intra-day high of 121.846 which was reached on December 8th 2014 from where a short but sharp reversal unfolded. This took the USDJPY to an intra-day low of 117.940 recorded yesterday on December 9th 2014 which tested the low end of a wide horizontal support area. The pullback additionally marked a false breakdown below its ascending support level which has assisted the strong advance in this currency pair. The violent snapback in the USDJPY after the false breakdown suggest that the upward momentum remains strong and a move higher is expected.
Price action is now trading just outside its horizontal support level and is likely to trade in and out of this area until the next move develops. The USDJPY is expected to stabilize around the 119.000 mark and accelerate to the upside. Binary options traders can profit from the anticipated acceleration with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 119.000 for a risk/reward ratio of 1.0/2.80.
Volatility is expected to spike as the USDJPY is trading inside a very import horizontal support level which would serve as a major resistance area should price action complete a successful breakdown; this would also mark the end of the strong move to the upside this currency pair has enjoyed. Sellers are expected to attempt a forced breakdown which may be limited to its intra-day low of 117.857 reached on December 1st 2014. Buyers are favored to take the strength of this horizontal support level as a platform to stabilize the move to the downside and pressure the USDJPY back to the upside in order to challenge its most recent intra-day high.
The USDJPY will face its first resistance level at its intra-day low of 119.337 which was reached on December 4th 2014. A breakout above this level will take the USDJPY to the key psychological resistance level of 120.000 from where an additional spike in volatility should be expected around the 120.250 mark which is where the intra-day high of 120.250 from December 4th 2014 and the intra-day low of 120.200 from December 8th 2014 merge. A breakout above this level will take the USDJPY to its intra-day high of 121.846 which was reached on December 8th 2014.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDJPY currency pair:
Monthly Budget Statement for the month of November:
• Expectations: A monthly budget deficit of $65.0 billion is expected for November
• Previous Report’s Data: A monthly budget deficit of $135.2 billion was reported in October
• Impact on the US Dollar: The anticipated slowdown in the monthly budget deficit out of the US is likely to suffice in order to push the US Dollar to the upside which favors binary call options in the USDJPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the USDJPY currency pair:
BSI Large Manufacturing and All Industry Index for the fourth-quarter of 2014:
• Expectations: BSI Large Manufacturing Index at 12.2 in the fourth-quarter, All Industry Index at 10.0
• Previous Report’s Data: BSI Large Manufacturing Index came in at 12.7 in the third-quarter, All Industry Index at 11.1
• Released Data: BSI Large Manufacturing Index at 8.1 in the fourth-quarter, All Industry Index at 5.0
• Impact on the Japanese Yen: The slowdown in both the BSI Large Manufacturing Index as well as the All Industry Index applied downward pressure on the Japanese Yen; this favors binary call options in the USDJPY currency pair