Major currency pairs. Part 2: Asia
- VFX Blog
- For beginners
Read the first part of how signals work for binary option in European currencies. In the second, we increase profits on Asian foreign exchange assets.
USD/JPY
The main currency pair of the Asian region in binary signal software. On average, it takes 14% of the daily turnover of the Forex market.
If you do not take into account the Eurozone, Japan's GDP is ranked 3rd after the US and China. The lack of natural resources makes the country dependent on their imports, especially oil – a fall or increase in its price causes a corresponding reaction in the yen
Fundamental factors
Important news and statistics can be found in the economic calendar of all best options trading platform, but the really strong movements are caused by two factors:
• Actions of the Central Bank – speeches of senior officials and currency interventions. Dependence on commodity imports makes excessive strengthening of the pair undesirable, so the Central Bank regularly intervenes in the Forex situation to maintain the exchange rate within acceptable limits. The last time major interventions were observed more than 3 years ago, but periodic incomprehensible impulses in the Asian session suggest that small injections continue!
• Change in the Nikkei 225 stock index. Part of the Central Bank’s shares is traded on the Tokyo stock exchange, which directly affects monetary policy. In addition, the Bank conducts independent exchange activities by placing government and buying private securities.
Technical analysis and binary option strategy
It is considered difficult to analyze the yen, but the main patterns work only "slower" than other major currency pairs, plus a few features:
• Daily average volatility is 90 pips. The most active time inside the day is the opening of the London Stock Exchange, the week is Wednesday;
• Most candlestick patterns work poorly on timeframes below the daily. The situation with price cases is the opposite: you can trade at shorter intervals (not lower than M15) as shown in the figure.
Fundamental factors
The main news is the change in the reserve rate of Reserve Bank of Australia. At present, it amounts to 1.5%, which makes the country an attractive target for foreign investment, primarily in sectors not related to production.
Low rate does not allow you to earn on the strategy "Carry Trade." Most brokers have a pair of long and short positions, respectively, of +0.5/-0.5%, which lowers the profit.
In addition to AUD, we are following the news on the dollar, gold and quotes of the Shanghai Mercantile Exchange. There is little reaction to fundamental events in the dollar and pound.
Technical analysis and strategies
The highest volumes and volatility of this pair (on average 70-80 during the day) are observed at the opening of the European session, namely the London session, and 3 hours of the American session when they overlap. Then there is a decline in live trading signals, and short-term spikes on strong news are possible in the Asian session.
It is best to focus on classic binary options trend strategies. As you can see from the picture, movements on EUR/USD are repeated, but more without sharp impulses, which is good for beginners. If you use multi-currency analysis or an automatic advisor other than the Euro, follow USD/CAD, AUD/CAD and USD/JPY.
Examples of best binary signal provider strategies:
• VfxAlert strategies for beginners;
• Moving averages as the best strategy on a binary option for newbies;
• Strategy Pathfinder − we trade flat and reversals;
• Doji and Engulfing patterns: non-indicator strategy for binary options;
NZD/USD
It is one of the top three Asian major currency pairs with 9% of the market volume.
The agricultural sector accounts for more than 50% of New Zealand's production. There are also stocks of silver, own energy sources about 15% of the total demand, the rest is imported, which makes the exchange rate dependent on world prices. There is also a developed tourism sector, which makes an increasing contribution to GDP.
The need to analyze Forex related markets is often exaggerated in binary options guide. This is the wrong approach: calm, mostly trending, without frequent speculation, the movement is ideal for novice traders!
Fundamental factors
Macroeconomic data are rarely published, which simplifies analysis. But you need to trade, so large players can start speculating on smaller events, so we do not follow the media and official sites:
• Like all major currency pairs, NZD reacts most strongly to the speech of the head of the Central Bank. But even here, usually, the momentum does not exceed 50-70 points.
• US data (as in other Asian currencies) has an impact, but the strength of top binary options signals will be less than for the Yen and Australian dollar.
• The main export item is dairy products, the price of which is formed at the international auction Global Dairy Trade. Data is released every 2 weeks, which gives a delayed reaction of the pair;
• The next important fundamental factor is the Commodity Research Bureau Index (CRB Index) that takes inflation for other exported goods (meat, textiles, wood, etc.). The increase in the index is the growth of the NZD/USD.
Technical analysis and binary signals
The main method of trading on NZD/USD is trend strategies with moderate risks. Despite the strong influence of fundamental factors, it is quite possible to work only on technical indicators during periods when there is no speculation.
Additional features of the pair:
• Stable liquidity of 40-80 points is maintained throughout the day, the total volatility rarely exceeds 100 points;
• More than 50% of all NZD trading operations account for commodity futures, options and CFD contracts. Therefore, on the dates of expiration and closing of reporting periods (month, quarter, year) there can be sharp impulses reaching 120-150 points;
• A strong reaction and usually with a «gap» to the release of national statistics is observed only if there is a strong discrepancy between the actual data and the forecast. If the difference is small, there may not be any fluctuations at all.
In addition to the above, many analysts refer the main currency pairs to the Chinese Yuan, or rather to the USD / CHN pair, which is the "version" for trading outside the country. Almost all brokers have access to this asset, the rate of which almost coincides with the official rate and can be used to analyze the overall situation of how binary options signals on the Forex market, especially during the Asian session.