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EUR/GBP binary signal - UK Inflation Report - 16 Jan 2018

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Expiry Time: 
21:00 GMT
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The UK's Office for national statistics (ONS) will be releasing the annual inflation data today at 0930 GMT. According to the economists polled, the UK's consumer price index is expected to slow 3.0% on an annual basis for the month ending December.

This is a slower pace of increase in consumer prices compared to the previous month. The core CPI data is also forecast to rise 2.6% on an annual basis in December. This compares to a slower pace of increase where in November, the core CPI was seen rising 2.7% on an annualized basis.

The inflation data will be an important data point for the UK data as it comes a full month after the Bank of England hiked interest rates in November. Inflation in the UK has remained stubbornly above the BoE's 3.0% target rate which is expected to see the BoE Governor Carney likely to write an explanation to the Chancellor of the Exchequer.

However, many analysts believe that the UK's inflation might have peaked in November. Prices are expected to fall in the coming months with the average forecasts for inflation expected to remain at 2.5% over the coming months. This will still put the UK's inflation rate well above the BoE's target rate.

The next rate hike from the BoE, based on the current projections is expected to see the next rate hike coming in August. But the uncertainty from the Brexit negotiations is expected to keep the bullish sentiment in check.

Based on the above EURGBP is our forex binary signal for the day. The currency pair has settled in a range in the medium term but we expect that the British pound could outperform the Euro.

Therefore, we are looking to purchase daily PUT options at 0.8900 for a 21:00 GMT expiry time. We expect EURGBP to slightly push higher on a intraday basis but eventually close lower on the day.

binary options signal eurgbp 16 Jan 2018

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.