Japan’s unemployment rate and Consumer Price Index (CPI) are due to be released at 23:30 GMT with expectations at 3.5% and 2.2% respectively.
In the past month we have seen USD/JPY stuck in a range between 118.7 and 120.5. Currently it is trading on the lower end of this range at 118.85 as observed in the chart below.
The Bank of Japan (BOJ) has lowered its CPI and GDP forecasts but maintained that its 2015 policy is steady.
If you think the pair will rebound from its lows on account of poor data from Japan or the strengthening of the Dollar, you can purchase a Call option that is out-of-the-money (OTM), which is cheaper than an at-the-money option (ATM).
The position:
Buy a Call with strike rate 119.20 that expires tomorrow (01-May-15) for amount 100,000 USD (1 lot).
Web-platform position:
MT4-platform symbol:
The chart below shows the profit or loss of the trade over a range of USDJPY rates at expiry If USDJPY moves to 119.495, you will be in 100% profit. If the pair trades lower, you cannot lose more than the premium of this option which is 80.77 GBP (124 USD).
The content provided is made available to you by ORE Tech Ltd for educational purposes only, and does not constitute any recommendation and/or proposal regarding the performance and/or avoidance of any transaction (whether financial or not), and does not provide or intend to provide any basis of assumption and/or reliance to any such transaction.
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