The Japanese Yen depreciation theme is likely to go on for a while
This week we will have a look at a very strong trend pair and establish some possible scenarios for trading the USD/JPY binary options forex pair. The Japanese currency is slumping across the board these days and we are very likely to see that pattern continuing in the next couple of days.
Identify support levels where to buy
We would be trading it on the buy calls side on a daily and weekly basis. However for that to occur we would need to identify some support levels from which to buy these. Let’s start from the topside and browse through on the lower end of our 4 hours chart. The first point where we would try to buy calls is the 102.50-60 area. We have a minor support line there which is moving up at 20 pips per day.
The second level that we pick is a stronger one and we would be doubling our bets if we reach it. It’s at 102.10-15 area and it is rising by 17 pips per day. The Japanese Yen is very likely to continue suffering from local authorities’ comments about stagnating growth and inflation rates that are not achievable even with the all-out monetary expansion that the BOJ is vociferously defending.
The third and last level at which we would be doubling our bets again is at 101.90, however we think that this level is not very likely to be achieved any time soon. In fact the upside could be tested fairly quick and in a sharp manner. The main resistance on the chart is the thick red line that comes at 103.70.
This is the level where earlier this year the Japanese Yen stopped its depreciation during the month of May. We actually think at this point in time that in the next weeks and months (maybe even days) this level will be breached and the depreciation of the Japanese currency will continue. Stay tuned to our commentaries in the Forum and ask your questions freely so we can assist you in your trading in a timely manner.
We will keep you updated if the Japanese authorities change their rhetoric and retract from their position to be a leader in the race to depreciate its own currency. This will certainly turn to a very nasty game so it’s worth the attention of binary options forex traders.