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 123.800
• Downside Potential: The downside potential for this binary put option is 490 pips to 118.900
• Upside Potential: The upside potential for this binary put option is 125 pips to 125.050
The USD/JPY has ended its powerful advance which originated from its intra-day low of 118.884 reached on May 14th 2015. The move to the upside was support by the formation of a bullish price channel. The ascending support level emerged from its most recent intra-day low while the ascending resistance level can trace its origin to its intra-day high of 120.233 which was recorded on May 8th 2015. The USD/JPY reversed its move after reaching its intra-day high of 125.052 yesterday on June 2nd 2015 and an increase in downward pressure has emerged.
Price action is now trading inside of its newly formed horizontal resistance level which is being intersected by its bullish price channel. The USD/JPY is anticipated to drift down into its ascending support level from where a breakdown is favored. Binary options traders can benefit from the expected breakdown with binary put options. Today’s binary options trading strategy suggests put options to be placed on rallies above 123.800 for a risk/reward ratio of 1.0/3.92.
The USD/JPY advanced inside of its bullish price channel with a contraction in volatility, but the false breakout above its horizontal resistance level as well as the following reversal have resulted in an increase in volatility. As price action is approaching its ascending support level a further increase in volatility is expected. Buyers may step in and attempt to keep the uptrend intact, but its most recent intra-day high is likely to prevent further upside. Today’s binary guide to options trading favors sellers successfully forcing a breakdown and entering a corrective phase.
The first support level awaits the USD/JPY at the ascending support level of its bullish price channel from where a breakdown will lead this currency pair to its intra-day low of 122.484 recorded on May 26th 2015. The next support level is set at its intra-day high of 121.476 which was reached on May 20th 2015; this level marks the high of a previous advance. A breakdown below this level will take the USD/JPY to its intra-day high of 119.809 recorded on May 7th 2015 which also represents the top end of its horizontal support level. The final support level is located at its intra-day low of 118.884 reached on May 14th 2015.
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:
Institute of Supply Management Non-Manufacturing Index for the month of May:
• Expectations: A level of 57.0 is expected for the month of May
• Previous Report’s Data: A level of 57.8 was reported in the month of April
• Impact on the US Dollar: The expected slowdown in the ISM Non-Manufacturing Index is likely to apply downward pressure on the US Dollar; this favors binary put options in the USD/JPY currency pair
In addition the following economic report out of Japan already impacted the quote currency, the Japanese Yen, of the USDJPY currency pair:
Markit Services PMI for the month of May:
• Expectations: A level of 51.1 was expected for the month of May
• Previous Report’s Data: A level of 51.3 was reported in the month of April
• Released Data: A level of 51.5 was reported for the month of May
• Impact on the Japanese Yen: The better-than-expected level in the Markit Services PMI pressured the Japanese Yen to the upside which favors binary put options in the USD/JPY currency pair
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