USD/JPY – Technical Analysis for Binary Options
Japan – Trade Balance
On Wednesday, at GMT 11:50 p.m., the Japanese Ministry of Finance will release the month-over-month national trade balance figure, which measures the difference in value between the total imported and exported goods over the last month. This data is usually reported by being seasonally adjusted in order to gauge the true changes in the trade balance situation of Japan.
The demand for a nation’s currency is directly correlated to the export it makes minus the net imports because foreigners must convert their currency to Yen in order to pay Japanese exporters. Hence, binary options traders and market analysts consider the trade balance to be a leading indicator of a currency’s strength.
Last month, the Japanese trade balance figure came out at 0.16 trillion (yen) and for the forecast for this month is set at 0.55 trillion.
United States – Unemployment Claims
On Thursday, at GMT 1:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.
Binary options investors consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.
Last week, the US unemployment claims figure came out at 240,00 and the forecast for this week is set at an increase to 241,000.
Trade Recommendation for the USD/JPY
Over the last several months, the USD/JPY remained in a strong uptrend and reached as high as 118.00 level. However, soon it started a retracement and remained ranged bound for the last few weeks, but found strong resistance near the 112.65 level.
As the US unemployment claims figure is expected to remain almost same as last week, but the Japanese trade balance is expected to increase to 0.55 trillion, we believe it would set a bearish fundamental outlook for the USD/JPY this week. Hence, if the USD/JPY price penetrates below the 112.65 level, it would likely attract additional bearish momentum in the market.
Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the USD/JPY with their binary options brokers as soon as the price closes below the 112.65 level on the daily timeframe.
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