April 13th, 2015 6:09am GMT, London UK
Today’s Binary Options Trading Strategy:• Currency Pair: USDJPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 120.200
• Downside Potential: The downside potential for this binary put option is 185 pips to 118.350
• Upside Potential: The upside potential for this binary put option is 100 pips to 121.200The USDJPY is currently drifting away from its most recent intra-day high of 120.736 which was recorded on April 9th 2015. This level represents the top end of its horizontal resistance level. Preceding this intra-day high was an advance which emerged from its intra-day low of 118.717 reached on April 3rd 2015. This level represents a higher low as compared to its previous intra-day low of 118.327 which was recorded on March 26th 2015. An ascending support level formed as a result and the advance from this ascending support level was halted by its descending resistance level.
Price action is now trading inside of its horizontal resistance level which is being enforced by its descending resistance level. The USDJPY is expected to drift down to its ascending support level from where a breakdown is favored. Binary options traders can profit from the anticipated breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 120.200 for a risk/reward ratio of 1.0/1.85.
Volatility decreased during the advance from its current intra-day low back into its horizontal resistance level, but an increase in volatility is expected as buyers and sellers are set to face off at an important, enforced resistance level. Buyers are likely to attempt a breakout above its horizontal support level which is not expected to be sustainable and result in a false breakout. Sellers are favored to take the enforced resistance level as a platform to pressure the USDJPY down into its ascending support level from where momentum is anticipated to force a breakdown. This will open the path lower into its horizontal support level.
The USDJPY will face its first support level at its ascending support level around the 119.700 mark. Downward momentum is expected to be strong enough to force a breakdown below this level which will take the USDJPY to its intra-day low of 118.717 recorded on April 3rd 2015. This level marks the origin of its most recent advance. The final support level is located at its intra-day low of 118.327 which was reached on March 26th 2015 from where a double bottom formation is expected to 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:
Monthly Budget Statement for the month of March:
• Expectations: A budget deficit of $43.4 billion is expected for the month of March
• Previous Report’s Data: A budget deficit of $36.9 billion was reported in the month of February
• Impact on the US Dollar: The expected increase in the budget deficit out of the US is likely to pressure the US Dollar to the downside; this favors binary put options in the USDJPY currency pair
In addition the following economic report out Japan already impacted the quote currency, the Japanese Yen, of the USDJPY currency pair:
Machine Orders for the month of February:
• Expectations: A monthly contraction of 2.2% was expected for February, an annualized increase of 4.3%
• Previous Report’s Data: A monthly contraction of 1.7% was reported in January, an annualized increase of 1.9%
• Released Data: A monthly contraction of 0.4% was reported for February, an annualized increase of 5.9%
• Impact on the Japanese Yen: The reported increase in annualized machine orders out of Japan started to apply upward pressure on the Japanese Yen which favors binary put options in the USDJPY currency pair