Weekly Binary Options Trading Briefings 21-28/10/2012 – Japanese Yen Heads Lower as BOJ Signals Stimulus

Binary Options Trading Recommendations for the upcoming week –  Market Information and Trading Tips

The Japanese Yen is now trading at its lowest levels in 9 weeks relative to the US Dollar (seen in the USD/JPY currency pair) as investors are beginning to price in the possibility that the Bank of Japan (BoJ) will opt to follow the lead of the US Federal Reserve and inject stimulus measures in order to support the nation’s economy.  The JPY was lower against almost all of its major counterparts and this movement is an implicit suggestion that investors are considering renewed interest in the carry trade, which is a positive gauge of broader economic sentiment.

 

Helping generate positive momentum was the Retail Sales report out of the US, which came in higher than market expectations for the most of September.  These broader economic views were also aided by the latest report showing the progress of housing starts in the US, which rose by a massive 15% for the month.   These figures are seen as supportive for the Euro and high yielding currencies, as broader economic strength will allow investors to bet on stability and look for yield rather than safety.  These views are expressed best in the behavior of the Japanese Yen, and the correlations that exist between the Yen and global stock markets as a whole are suggestive of positive moves in share values in the months ahead.

 

Spain Avoids Massive Downgrades

          The upward momentum in currency values extended to the Euro, which is trading as its highest levels this month (relative to the US Dollar), propelled in large part by the news that Spain will keep its Moody’s investment grade credit rating.  This is positive mostly for bond markets, which means that borrowing costs in Spain will not likely reach unmanageable levels.  This is a preferable outcome for the Euro region as a whole and investors responded by pushing the EUR/USD higher.

 

          Looking ahead, corporate earnings are still going to be the main driver in the financial markets in the coming weeks, so binary options traders will want to pay special attention to these releases as they are made public.

 

My Trading Recommendations in 50 Words:  

 

1. The USD/JPY has broken out of its longer term descending triangle at the same time it broke above its 100 day EMA, so the longer term view is positive into the end of the year.  I will be looking to establish 1 hour CALL trades in this pair as prices approach 78.60 in the coming week. 

 

2. The latest rally in the S&P 500 is opening the way for some good PUT entries for the index into 1455.  In the coming week, I will be looking to enter into daily PUTS at these levels.  An hourly close above these levels, will cause me to move my entry 10 points higher.

 

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