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USD/JPY Forecast 10 Apr 2014

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USD/JPY Chart 10 Apr 2014
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Buying daily calls in USD/JPY from 101.60-65

We are currently seeing the price of the USD/JPY binary options forex pair trading at 101.65, we believe that the recent fall in the price of this pair is a touch overdone. Therefore after looking at current conditions we would be buying daily calls for export later tonight.

The main reason behind this call is that all negative news in the market have been largely priced in in our view. The main hurdle from a technical perspective is the pair dropping to the 101.50 area and breaking lower, however we don't think this will be the case.

If that happens we would reverse our position and double up on the bed to buying daily put options on the USD/JPY. Jobless claims from the US have dropped all the way down to 300,000 this week, which is a very positive indicator for the spring labor market.

After a brisk rise in unemployment claims during the winter season, related to the extreme weather events that have been accompanying the US economy, we are seeing these numbers fall back finally. A great development for all of those who believe that the US dollar is likely to go higher in the coming months.

After the news was digested the pair has gotten to levels above 101.95, however new sellers emerged to push back towards current levels just above 101.60. Should we see a substantial rise to probe the upside, watch for a brisk rise towards 102 and 102.20 will be the key level to watch.

In fact if that level is tested and broken there is a fair reason to believe that the move will continue towards 102.50 and subsequently 103. That said, the downside will be open if we see a substantial break below 101.42 which is today's previous low on the hourly charts. Happy trading!

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