Today’s Binary Options Trading Strategy:
• Currency Pair: AUD/JPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 91.500
• Upside Potential: The upside potential for this binary call option is 580 pips to 97.300
• Downside Potential: The downside potential for this binary call option is 220 pips to 89.300
The AUD/JPY has extended its slide after a brief drift to the upside which has kept the general downtrend intact. This was the second move to the upside which was reversed to a lower low. The first drift higher developed from its intra-day low of 94.250 which was reached on January 14th 2015. The second drift higher emerged from its intra-day low of 92.163 which was recorded on January 26th 2015. The AUD/JPY is now expected to launch its third attempt from its intra-day low of 90.570 which was reached today on February 2nd 2015.
Price action is now trading inside a newly formed horizontal support level where downward pressure is fading away. The AUD/JPY is expected to attempt its third drift to the upside inside its overall downtrend. Binary options traders can take advantage from the anticipated price action reversal with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 91.500 for a risk/reward ratio of 1.0/2.64.
Volatility has decreased during the move to the downside, but did increase with each upward drift. Volatility is set to increase once again as the new horizontal support level is being intersected by a steep descending resistance level. The AUD/JPY is likely to trend sideways inside its horizontal support level until it approaches its descending resistance level. Sellers may attempt to force a breakdown, but are not expected to succeed. Buyers are favored to successfully breakout above its descending resistance level and form its third upward drift.
The AUD/JPY will face its first resistance level at its intra-day low of 92.163 which was reached on January 26th 2015 and represents the platform for the second drift to the upside. A breakout above this level will take the AUD/JPY to its intra-day high of 94.615 which was reached on January 28th 2015 and represents the last time this currency pair met its descending resistance level. The final resistance level is located at its intra-day high of 97.388 which was reached on January 20th 2015. The descending resistance level originates from this point from where additional upside is limited.
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 January:
• Expectations: A level of 48.1 was expected for the month of January
• Previous Report’s Data: A level of 46.9 was reported in the month of December
• Released Data: A level of 49.0 was reported for the month of January
• Impact on the Australian Dollar: The reported increase in the AiG Performance of Manufacturing Index has lifted the Australian Dollar; this favors binary call options in the AUD/JPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the AUD/JPY currency pair:
Final Markit/JMMA Manufacturing PMI for the month of December:
• Expectations: A final level of 52.1 was expected for the month of December
• Previous Report’s Data: A level of 52.1 was initially reported for the month of December
• Released Data: A final level of 52.2 was reported for the month of December
• Impact on the Japanese Yen: The upward revision to the Markit/JMMA Manufacturing PMI for December has failed to pressure the Japanese Yen to the upside which favors binary call options in the AUD/JPY currency pair