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 186.600
• Upside Potential: The upside potential for this binary call option is 305 pips to 189.650
• Downside Potential: The downside potential for this binary call option is 165 pips to 184.950
The GBP/JPY has recently bounced off of its ascending support level, but the bounce was halted by its descending resistance level. The GBP/JPY was faced with a move to the downside after recording an intra-day high of 189.681 on December 8th 2014. The corrective phase reached an intra-day low of 184.957 on December 10th 2014. The GBP/JPY is now trading just outside its horizontal support area which successfully reversed the move to the downside with the help of it ascending support level.
Price action is currently trapped inside its triangle formation just above its horizontal support level. The GBP/JPY is expected to breakout above its descending resistance level and accelerate to the upside in order to challenge its most recent intra-day high. Binary options traders can benefit from the anticipated breakout with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 186.600 for a risk/reward ratio of 1.0/1.85.
The GBP/JPY has experienced a decrease in volatility during the move lower, but this currency pair is likely to be exposed to a sharp spike as the triangle formation will cause a build-up in pressure. This will force the GBP/JPY to either breakout above or breakdown below its triangle formation. Sellers may attempt to extend the current move lower with a breakdown; any potential breakdown is expected to be limited to its intra-day low of 184.957. Buyers are likely to take the horizontal support area in combination with its ascending support level to launch a breakout. This favors binary call options in the GBP/JPY currency pair.
The GBP/JPY will face its first resistance level after a successfully breakout above its triangle formation at its intra-day high of 187.748 which was reached on December 11th 2014. A breakout above this level will take the GBP/JPY to its intra-day high of 188.229 which was reached on December 4th 2014. This level has previously pushed the GBP/JPY to the downside from where a spike higher took it to its most recent intra-day high. The final resistance level awaits the GBP/JPY at its intra-day high of 189.681 which was reached on December 8th 2014.
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:
CBI Trends Data for the month of December:
• Expectations: CBI Trends Total Orders at 3 in December, CBI Trends Selling Prices at -3
• Previous Report’s Data: CBI Trends Total Orders were reported at 3 in November, CBI Trends Selling Prices at -1
• Impact on the British Pound: The unchanged reading in CBI Total Orders is expected to suffice in order to strengthen the British Pound which favors binary call options in the GBP/JPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the GBPJPY currency pair:
Tankan Survey for the fourth-quarter of 2014:
• Expectations: Tankan Large Manufacturing Outlook was expected at 13 in the fourth-quarter, Tankan Non-Manufacturing Outlook at 14
• Previous Report’s Data: Tankan Large Manufacturing Outlook was reported at 13 in the fourth-quarter, Tankan Non-Manufacturing Outlook at 14
• Released Data: Tankan Large Manufacturing Outlook was reported at 9 in the fourth-quarter, Tankan Non-Manufacturing Outlook at 15
• Impact on the Japanese Yen: The slowdown in growth in the Tankan Survey has applied downward pressure on the Japanese Yen; this favors binary call options in the GBP/JPY currency pair