The US dollar is poised to go higher so we explore opportunities to buy calls
Our daily forecast is turning our heads in the direction where we were most successful last week – that is our weekly strategy on the USDJPY binary options forex pair.
We have observed a substantial drop from recent highs around 103.30. Today we will make a bet on the future of the USDJPY pair. Our call is to buy daily calls from current levels around 102.75 and we will be waiting for the rate to pick up during the US trading session. Starting with a mild pullback to 102.70 we think that this is all that the bears can squeeze for now.
Underlying data from Japan has been very negative on the Japanese Yen. The country has a trade deficit now and the GDP figures were revised lower in a recent report. This can only lead to one thing – more easing from the Bank of Japan and a lower yen.
While we maintain our bullish call it is worth mentioning that from a technical side if the pair manages to sustain a break below 102.50 on an hourly basis our task will become more difficult and we will be staying out of the market in that case. For now at least it is worth noting that the upside is open until 105.
The pair started trading in Asia by equaling the highs from last week around 103.37 and almost reaching 103.40. Subsequent drop in sentiment towards the dollar weighed on the pair as the Greenback is mostly weaker across the board.
We would advise more aggressive players to be buying hourly calls in the 102.70’s. The risk reward ratio is rather good. With the US way on its way to become an oil exporter and Japan being increasingly dependent on fossil fuels following the shutdown of its nuclear reactors this trend is not likely to stop any time soon.