USD/JPY: Moves Upward Inside Its Bullish Price Channel
GOption | Sep 16, 2014 03:30AM ET
Today’s Binary Options Trading Strategy:
• Currency Pair: USD/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary put options on rallies above 107.150
• Downside Potential: The downside potential for this binary put option is 190 pips to 105.250
• Upside Potential: The upside potential for this binary put option is 85 pips to 108.000
The USD/JPY has caught a sharp advance as this currency pair moved upward inside its bullish price channel, but after a breakout above its bullish price channel the advance became too steep to be sustainable which makes this currency pair vulnerable for a reversal. The USD/JPY started its sharp advance after recording an intra-day low of 101.511 on August 8th 2014 and the sharp move higher has reached an intra-day high of 107.380 on September 12th 2014.
Price action is showing signs of weakness with a set of lower highs followed by lower lows which are expected to push the USD/JPY lower from current levels. Binary options traders can take advantage from the expected move lower with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 107.150 for a risk/reward ratio of 1.0/2.24.
The advance which followed the breakout of the bullish price channel is starting to lose strength and the expected move lower is expected to test the ascending resistance level of the bullish price channel which currently acts as an ascending support line. The USD/JPY is likely to breakdown into its bullish price channel and test the ascending support line of its bullish chart formation. An increase in volatility is expected to accompany the expected breakdown.
Given the projected path for the USD/JPY the next support level is located at 106.550 which is the ascending support line of the bullish price channel. A breakdown would take this currency pair to the 106.039 level which is an intra-day low reached on September 9th 2014 prior to the breakout. The next support level awaits the USD/JPY at the 104.683 level which is an intra-day low reached on September 5th 2014 and the last time the ascending support line was tested.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USD/JPY currency pair:
Get The News You Want
Producer Price Index for the month of August:
• Expectations: A monthly reading of 0.0%, annualized increase of 1.8%
• Previous Month’s Data: A monthly increase of 0.1%, annualized increase of 1.7%
• Impact on the US Dollar: The expected annualized increase in the PPI may not be strong enough to support a higher Dollar; this favors binary put options in the USD/JPY currency pair
In addition the following economic report out Japan is expected to impact the quote currency, the Japanese Yen, of the USD/JPY currency pair:
Speech by Bank of Japan Governor Kuroda:
• Expectations: Governor Kuroda is expected to reaffirm the current stance of the Bank of Japan and its focus on sustainability in price trends
• Impact on the Japanese Yen: The Japanese Yen has already experienced excessive weakness and moved into depressed territory and with no surprise from Kuroda this favors binary put options in the USD/JPY currency pair
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.