AUD/JPY: Enjoying A Strong Move To The Upside
GOption | Mar 02, 2015 02:15AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: AUD/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 93.000
• Downside Potential: The downside potential for this binary put option is 225 pips to 90.750
• Upside Potential: The upside potential for this binary put option is 95 pips to 93.950.
The AUD/JPY has enjoyed a strong move to the upside after reaching an intra-day low of 91.261 on February 12th 2015. This intra-day low marked the low reached during a drift to the downside from its intra-day high of 93.102 which was reached on February 6th 2015. A bullish price channel emerged which guided this currency pair to its most recent intra-day high of 93.959 which was recorded on February 25th 2015. The AUD/JPY started to drift away from this intra-day high as downward pressure increased.
Price action is now trading just below its horizontal resistance level which is being intersected by its bullish price channel.
The AUD/JPY is expected to breakdown below its ascending support level and enter a corrective phase back down to its horizontal support level. Binary options traders can take advantage from the anticipated corrective phase with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 93.000 for a risk/reward ratio of 1.0/2.37.
Volatility has decreased during the advance as the bullish price channel guided this currency pair to the top end of its horizontal resistance level, but an increase in volatility is expected as the AUD/JPY started to drift lower. Buyers are likely to attempt a reversal once price action reaches its ascending support level. Any potential move higher is expected to be limited to its current intra-day high. Sellers are anticipated to take the built-up in downward momentum and successfully breakdown below its bullish price channel. This favors binary put options in the AUD/JPY currency pair.
The AUD/JPY will face its first support level, after a successfully breakdown below its bullish chart pattern, at its intra-day low of 92.724 which was reached on February 27th 2015. This level marked the last time the ascending support level pressured this currency pair to the upside. A breakdown below it will take the AUD/JPY to its intra-day low of 91.261 which was recorded on February 12th 2015. This level represents the origin of its bullish price channel. The final support level is located at its intra-day low of 90.715 which was reached on February 4th 2015.
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The following economic data out of Australia already impacted the base currency, the Australian Dollar, of the AUD/JPY currency pair:
AiG Performance of Manufacturing Index for the month of February:
• Expectations: A level of 48.2 was expected for the month of February
• Previous Report’s Data: A level of 49.0 was reported in the month of January
• Released Data: A level of 45.4 was reported for the month of February
• Impact on the Australian Dollar: The reported continuation of the contraction in the AiG PMI has applied downward pressure on
the Australian Dollar; this favors binary put options in the AUD/JPY currency pair
In addition the following economic report out Japan already impacted the quote currency, the Japanese Yen, of the AUD/JPY currency pair:
Capital Spending for the fourth-quarter of 2014:
• Expectations: A quarterly increase of 4.1% was expected for the fourth-quarter of 2014
• Previous Report’s Data: A quarterly increase of 5.5% was reported for the third-quarter of 2013
• Released Data: A quarterly increase of 2.8% was reported for the fourth-quarter of 2014
• Impact on the Japanese Yen: The reported slowdown in capital spending out of Japan is being overshadowed by economic data released out of Australia which favors binary put options in the AUD/JPY currency pair
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