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EUR/GBP binary signal - UK Inflation - 11 April 2017

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Signal details
Entry Price: 
Close Price: 
Expiry Time: 
20:00 GMT
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The monthly inflation report from the Office for National Statistics (ONS) will be released today and the data is forecast to show a headline print of 2.2% on a year over year basis. The core CPI which excludes food and energy prices is also forecast to rise 1.8%. The forecast for both the headline and core CPI is expected to be slightly lower compared to the previous month where inflation in the UK surged at the fastest pace in three years and also breached the 2% inflation target that was set by the Bank of England.

After a rather strong increase in consumer prices, the data for March is expected to show some moderation, although inflation is poised to remain above the 2% threshold, the decline is expected on a soft pullback in energy prices. Despite a weaker forecast in inflation it is unlikely to see any major changes to the broader inflation outlook.

The Bank of England has so far signaled that it is willing to remain tolerant of an overshoot of inflation above its 2% target. Some experts estimate that at the current pace, inflation could reach 3% by the end of this year, contrary to the BoE's projections which put the inflation forecast in the rage of 2% - 2.5%, a conservative estimate by some measures.

Today's inflation data will no doubt impact the British pound at least in the short term.
Based on the inflation data coming out today, the EURGBP binary options trade recommendation is to purchase daily PUT options in expectations of a downside move in EURGBP as the British pound could be seen strengthening on an intraday basis.

Technical support at 0.8530 which is breached is likely to be tested in the near term ahead of the inflation data. Thus, purchase daily PUT options at 0.8530 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.