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EUR/GBP binary signal - UK Services PMI - 05 Sep 2017

Signal details
Entry Price: 
0.9200
Close Price: 
0.9144
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 4 ratings

The UK services PMI data will be released today at 08:30 GMT. According to the economists polled, the services activity is expected to remain broadly stable at 53.6 in August. This is just a few points lower than July's 53.8. The services PMI data today will conclude the PMI numbers for the month of August.

So far, the PMI data has showed that the UK's manufacturing activity accelerated in August, rising from 55.3 in July to 56.9 in August. This was above forecasts and was seen to be optimistic. The construction PMI which was released yesterday showed a slowdown in activity in the sector. According to official data, construction activity rose at the slowest pace in 12 months in August.

The construction PMI rose to just 51.1, missing estimates of 52.1 and down from 51.9 in July. However, the declines in the construction sector was clearly offset by the manufacturing activity. In this context, today's services PMI will be an important data point. Another surprising weakness in the services sector could potentially dampen the sentiment even further in the UK.

The British pound has been struggling across the board although the currency managed to maintain some gains. The economic releases coming out this week, namely the PMI's will be taken into consideration when the Bank of England meets next week.

Although the data is unlikely to change the BoE's interest rates, it could potentially hamper any plans for the BoE as it plans to start its rate hike cycle later in 2018. Alongside the uncertainty from Brexit and the EU negotiations which haven't been going anywhere, the British pound is likely to remain subdued.

Based on the above, today's binary options signal is EURGBP. The currency pair was seen forming an inside bar yesterday with price action subdued within last Friday's range near 0.9200. We expect to see some short term correction in EURGBP especially with the euro currency likely to come under the influence of this Thursday's ECB meeting.

Therefore, we would purchase daily PUT options at 0.9200 for a 20:00 GMT expiry. We expect that the resistance forming at 0.9200 will help to push EURGBP to close lower on the day.

binary options signal eurgbp 05 Sep 2017

Comments

fafza's picture

My trade is now deep in the money. Thank you!

fafza
Toni H.'s picture

Yeah, so far looks good :)

Toni H.

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.