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EUR/GBP binary signal - UK Manufacturing production - 08 Sep 2017

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Expiry Time: 
20:00 GMT
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Manufacturing and industrial production data from the UK will be released today at 08:30 GMT for the month of July. According to the median estimates, manufacturing activity in the UK is expected to advance 0.3% on the month following a flat print in June. Industrial production numbers are expected to rise just 0.2%, following a 0.5% increase the month before. Finally the construction output data is forecast to fall 0.2%, extending the declines for the second month.

While the three sectors are broadly expected to remain largely flat, recent PMI figures across these three sectors showed that with the exception of manufacturing, both construction and the services sector weakened significantly in August. Most of the declines were attributed to lower construction activity including a slowdown in the services sector.

The UK's services sector has been one of the strongest drivers of growth so far. However with the recent decline in services PMI, the data suggests that the economic growth might be stalling in the UK especially in the third quarter. The implications of today's data come into focus as the Bank of England will be meeting next week.

The central bank is not expected to make any major announcements as it previously signaled that it will not raise rates until 2018. However, with the weakness in the economy and wages staying muted, the question on the 2018 rate hikes remains in doubt. This potentially increases the downside risks from the central bank. Inflation has managed to remain strong putting a squeeze on household income which continues to stagnate.

Based on the above, today's binary signal is EURGBP. Despite the weak set of data from the UK, the British pound has managed to maintain some gains. However, against the euro the British pound still remains weak.

Therefore, we would purchase daily CALL options at 0.9150 for a 20:00 GMT expiry time. We expect to see the EURGBP continuing to push higher following the pull back and to close higher on the day.

binary options signal eurgbp 08 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.