GBP/JPY Binary Call Option – January 20th 2015
GOption | Jan 20, 2015 04:59AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: GBP/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 178.200
• Upside Potential: The upside potential for this binary call option is 820 pips to 186.400
• Downside Potential: The downside potential for this binary call option is 320 pips to 175.000
The GBP/JPY found stability inside its horizontal support level after an extended corrective phase forced this currency pair away from its intra-day high of 187.799 which it reached on December 29th 2014. The move to the downside recorded an intra-day low of 175.786 on January 16th 2015 which marked a false breakdown below its horizontal support level. The GBP/JPY was able to drift higher from its most recent intra-day low and back inside its horizontal support level.
Price action is currently trading inside its horizontal support level from where an increase in upward momentum is anticipated. The GBP/JPY is expected to use the current drift higher together with the increase in upward momentum for a breakout and accelerated move to the upside. Binary options traders can take advantage from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 178.200 for a risk/reward ratio of 1.0/2.56.
Volatility has gradually decreased during the corrective phase, but is expected to increase as the GBP/JPY will face an increase in pressure to either breakdown below its horizontal support level or breakout above it. The current sideways trend which has developed inside its horizontal support level has deflated downward momentum and allows for the accumulation of upward momentum. Sellers may attempt to force another breakdown which is unlikely to materialize while buyers are expected to launch a breakout and accelerate to the upside. This favors binary call options in the GBP/JPY currency pair.
The GBP/JPY will face its first resistance level at its intra-day high of 180.934 which was recorded on January 8th 2015. This level represents the high reached during a previous drift higher before the GBP/JPY resumed its move to the downside. A breakout above this level will take the GBP/JPY to its next resistance level at its intra-day low of 182.677 which was recorded on January 5th 2015 from where a further breakout will lead this currency pair to its intra-day low of 184.949 reached on December 30th 2014. The final resistance level is located at its intra-day low of 186.478 which was reached on December 23rd 2014.
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The following economic data out of the United Kingdom is expected to impact the base currency, the British pound, of the GBP/JPY currency pair:
30-Year Bond Auction for the month of January:
• Expectations: An interest rate of 2.9% is expected for the month of January
• Previous Report’s Data: An interest rate of 2.7% was reported for the month of December
• Impact on the British pound: The anticipated increase in the interest rate for the 30-Year UK Gild is likely to apply upward pressure on the British Pound; this favors binary call options in the GBP/JPY currency pair
In addition the following economic report out of Japan is expected to impact the quote currency, the Japanese yen, of the GBPJPY currency pair:
Annualized Convenience Store Sales for the month of December:
• Expectations: An annualized contraction of 1.9% is expected for December
• Previous Report’s Data: An annualized contraction of 1.7% was reported for November
• Impact on the Japanese yen: The expected annualized contraction in convenience store sales is likely to apply downward pressure on the Japanese yen which favors binary call options in the GBP/JPY currency pair
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