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EUR/GBP binary signal - UK Manufacturing PMI - 02 May 2017

Signal details
Entry Price: 
0.8457
Close Price: 
0.8446
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 3 ratings

The UK's manufacturing Purchase Managers Index (PMI) is due for release today at 0930 GMT. Economists polled are expecting to see the manufacturing PMI grow at a slower pace, with expectations tied in for a headline increase to 54.0. This is lower than March's reading of 54.2 and will mark a fourth consecutive month of declines, after the PMI rose to a high of 56.1 in December 2016.

Overall, the manufacturing sector was seen growing at a slower than expected pace. Data released so far reflected this view, which included the United States' Institute of Supply Management (ISM) manufacturing PMI as well as that from China. Therefore, this increases the possibility that the UK's manufacturing could also rise at a slower pace. While this is priced in, the prospects of a rebound cannot be ruled out, especially in light of a weaker exchange rate that is bound to be supportive of the sector.

This potential surprise could evidently rub into an upside rally in EURGBP which looks weaker already against a stronger British pound which touched a 6-month high against the U.S. dollar just last week.

The EURGBP has been seen recovering as price turned bullish in yesterday's trading. This comes after nearly three days of declines previously. On the short term charts we see some clear evidence of upside in prices as identified by the ascending triangle pattern that is currently being formed. EURGBP is looking to break out from the resistance level at 0.8457. A successful breakout from here could signal further upside in prices.

Therefore, for today's binary options trading signal, purchase daily CALL options at 0.8457 for a 20:00 GMT expiry time. The break out to the upside will signal further gains in EURGBP. The euro is likely to remain subdued heading into this week's final round of voting in the French elections and as a result, the British pound could be looking at posting some gains as a result. Today's manufacturing PMI from Markit/CIPS is likely to be the catalyst as a result.

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. He has no business nor personal relationships with any mentioned government entities or stocks. 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.