The US dollar continues to hold strong, buying calls against the Japanese yen
As we are drawing to the close of the week, there are still some nice opportunities in the binary options market. We are looking at the USD/JPY binary options forex pair and are determining that it is very likely at this point in time that the US dollar will continue its rally and cement its position higher at the end of the week.
The main reason for that is that a key trend line to the downside has already been tested three times and the US currency is holding strong, not giving up ground. We would be buying daily calls for tonight's expiry at 20:00 GMT, around 107.80 if we reach that level in the coming hours.
On the downside, the move lower can only unfold if we see a drop in prices towards 107.60 and a subsequent close lower on an hourly basis. Since there is little information from the economic calendar going forward we are expecting quite trading to prevail and this event to be unlikely to happen.
The US dollar has been strong today across the board after speculation about a more dovish Federal Reserve has been out on the back burner and caused the currency to drop against all of its major counterparts after the Federal Reserve minutes announcement on Wednesday.
We have not been particularly enthusiastic regarding the developments on the Japanese market either - the Bank of Japan is likely to print even more money, which is not likely to lead to a stronger yen in the near and in the long run.
If we see a break above the trend line which has been confining the range to the upside there is a big likelihood for some stops to be triggered in the run up to the close of the week and trading in the US until Tuesday. Monday is a holiday, which will result in higher trading activity in the US session tonight.