Major currencies were closeted within tight ranges on Wednesday as investors awaited the signing of a U.S.-China trade deal nL4N29K22S.
USD/JPY got a boost to 110.22 this week when the U.S. Treasury removed its designation of China as a currency manipulator nL1N29I1PF, sparking a bout of profit-taking that has helped to stall spot's rise.
Once the signing ceremony is concluded, there is a good chance USD/JPY's rise will resume.
Last week's rebound formed the biggest white candlestick line since October 2019, meaning the potential for further gains above the 110.53 Fibo -- a 76.4% of the 112.40 to 104.46 drop -- is high.
Traders wanting to take on a leveraged bet to cover USD/JPY's upside can buy a two-week 109.90 USD call option at a cost of 35 pips, priced with spot at 109.90.
Profit potential is unlimited if spot is above the 110.25 break-even point at the Jan.
Losses are limited to the 35-pip premium.