Today’s Binary Options Trading Strategy:
• Currency Pair: USDJPY
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 119.700
• Upside Potential: The upside potential for this binary call option is 110 pips to 120.800
• Downside Potential: The downside potential for this binary call option is 50 pips to 119.200
The USDJPY has reversed from its current intra-day high of 120.503 which was reached on May 5th 2015. This represented a lower high as compared to its previous intra-day high of 120.842 recorded on April 13th 2015 and is located just beneath its horizontal resistance level. The lower high has additionally allowed for the formation of a descending resistance level which is increasing downward pressure on this currency pair. The corrective phase was halted inside of its horizontal support level with an intra-day low of 119.203 reached yesterday on May 6th 2015.
Price action is now trading inside of its horizontal support which is being enforced by its ascending support level. The USDJPY is expected to advance from its enforced support level until it can challenge its horizontal resistance level. Binary options traders can take advantage from the anticipated move to the upside with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 119.700 for a risk/reward ratio of 1.0/2.20.
Volatility has decreased during its corrective phase, but an increase in volatility is anticipated as the USDJPY is trapped inside of a triangle formation. Sellers are likely to attempt a breakdown below its horizontal support level, which is being enforced by its ascending support level, in order to extend the move to the downside. Buyers are expected to take its enforced support level as a platform to push the USDJPY to the upside in order to challenge its intra-day high of 120.842. This favors binary call options in the USDJPY currency pair.
The USDJPY will face its first resistance level at its intra-day high of 120.044 which was recorded yesterday on May 6th 2015. This level marked the high of a minor drift to the upside before this currency pair resumed its corrective move. A breakout above this level will take the USDJPY to its descending resistance level around the 120.350 mark. The final resistance level awaits the USDJPY at its intra-day high of 120.842 which was reached on April 13th 2015 from where a double top formation may emerged and challenge an extension of the advance.
The following economic data out of the United States is expected to impact the base currency, the US Dollar, of the USDPY currency pair:
Consumer Credit for the month of March:
• Expectations: A level of $15.800 billion is expected for the month of March
• Previous Report’s Data: A level of $15.516 was reported in the month of February
• Impact on the US Dollar: The expected increase consumer credit is likely to pressure the US Dollar to the upside; this favors binary call options in the USDJPY currency pair
In addition the following economic report out Japan already impacted the quote currency, the Japanese Yen, of the USDJPY currency pair:
Markit/JMMA Composite PMI & Services PMI for the month of April:
• Expectations: A level of 50.8 was expected in the Composite PMI for the month of April, a level of 51.1 in the Services PMI
• Previous Report’s Data: A level of 49.4 was reported in the Composite PMI for the month of March, a level of 48.4 in the Services PMI
• Released Data: A level of 50.7 was reported in the Composite PMI for the month of April, a level of 51.3 in the Services PMI
• Impact on the Japanese Yen: The reported level in the Markit/JMMA Composite PMI and the Services PMI failed to lift the Japanese Yen which favors binary call options in the USDJPY currency pair