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EUR/GBP binary signal - UK GDP 2nd estimate - 25 May 2017

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Expiry Time: 
20:00 GMT
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The UK's Office for National Statistics (ONS) will be releasing the second revision to the first quarter gross domestic product (GDP) at 0830 GMT today. According to estimates, no changes are expected to the quarterly GDP number, which will confirm that the UK's economy expanded at a pace of 0.3% in the three months ending March 2017.

On a year over year basis, this will put the annual GDP growth rate at 2.1%. The data is likely to confirm that the UK's economy slowed down sharply in over a year with most of the declines in growth coming from a drop in the services sector which has previously contributed a lot to the economy.

In its initial release, the Office for National Statistics said that the services aggregate, which was the main contributor to the UK's GDP posted a huge drag on economic growth, adding just 0.23 percentage points. There was however weakness across other sectors too such as production, construction and agriculture which added just 0.04 percentage points.

The decline in the UK's GDP is seen as a direct result of the Brexit referendum. Although no formal negotiations had begun, the slowdown was expected to be intensified during the Brexit process and could potentially see further slowdown in the UK's economy as businesses make plans to shift their base outside of London and to Europe.

Consumer spending was also weaker and is only set to continue to worsen. The most recent economic data showed that wages continued to lag behind inflation putting a squeeze on household spending. The initial euphoria of a weaker British pound is clearly starting to fade. Despite the broadly negative headlines, the UK's economy has been expanding for 17 consecutive quarters.

Based on the above information, today's binary options trade recommendation is EURGBP. The euro has been recouping its losses against the British pound, but price action indicates a near term downside. Therefore, purchase daily PUT options at 0.8660 for a 20:00 GMT expiry time.

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.