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EUR/GBP binary signal - German ZEW Economic sentiment - 19 Sep 2017

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The ZEW institute will be releasing the German economic sentiment report (as well as the eurozone ZEW economic sentiment report) later today at 0900 GMT. According to the estimates, German economic sentiment is expected to rise to 12.3, up from 10.0 previously. While the Eurozone economic sentiment is expected to rise to 32.4, accelerating from 29.3 previously.

The data will potentially signal the economic confidence in both Germany and the Eurozone as an aggregate. While not directly impacting the markets, the better than expected data which matches the estimates could simply boost further confidence in the euro area. This will most likely in turn translate to convincing the markets that the ECB might have to move faster than expected in regards to tightening monetary policy.

Still, the sentiment in the markets is quite speculative and there is scope for a correction. In August, the ZEW sentiment for Germany posted a strong decline, representing a strong decrease in expectations. The indicator's long term average stands at 23.8. For September, the economic sentiment report is expected to rise back above this long term average.

Being a forward looking indicator, the ZEW economic sentiment is subject to volatility and therefore traders will likely brush aside any negative news. But with the euro currency surging strongly in the past month, a higher exchange rate could potentially impact the German exporters.

Based on the above, today's recommendation for binary options trading signal is EURGBP currency pair. The EURGBP posted strong declines last week as the GBP rally outperformed that of the euro. However, the longer term bias in EURGBP is still to the upside. Price action yesterday saw the currency pair recovering after posting strong declines for the whole of last week.

Technical resistance is found of 0.8871, where we expect EURGBP to post a modest decline to test the support at 0.8830. Therefore, we purchase daily CALL options at 0.8830 as we expect to see EURGBP pushing to close higher on the day.

eurgbp signal 19 Sep 2017

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.