USD/JPY's daily chart has a bullish tilt and that is being reinforced by fundamentals. nL1N2RM0RW A simple option strategy can be used to cover short-term gains.
USD/JPY hit a four-year EBS high of 114.69 on Oct.
20 then subsequently dropped to a one-week EBS low of 113.42 on Friday.
The drop was stemmed by the 113.28 Fibo, a 23.6% retrace of the 108.73 to 114.69 rise and there is talk Japanese importer, investor bids remain ahead of it.
USD/JPY bulls should stay in control unless there's a daily close under the 113.28 Fibo, as that would increase the downside risk.
FX traders wanting to insure against a USD/JPY rise could buy a one-week 113.80 USD call option at a cost of 37 pips, priced with spot at 113.74.
Profit potential is unlimited if spot is above the 114.17 break-even point at the Nov.
Losses are limited to the 37-pips premium paid.
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