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EUR/JPY binary signal - ECB monetary policy - 05 Oct 2017

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Expiry Time: 
20:00 GMT
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The European Central Bank will be releasing the monthly meeting minutes from its September monetary policy meeting today. According to the widespread speculation, the ECB meeting minutes could provide initial clues for the markets on the ECB's plans for announcing its tapering program in October. The meeting minutes will be released at 11:30 GMT today.

The ECB's minutes cover the monetary policy meeting from the September meeting. The central bank had left monetary policy unchanged and also did not make any decision on tapering. The ECB instead said that it will decide when it meets this month, towards the last week of October.

The markets are widely positioned to expect the ECB to announce at least 20 billion euro reduction to its current QE program. This is expected to start from January and could bring down the ECB's stimulus purchases from the current 60 billion to just 40 billion. The markets are also expecting the ECB to take a hawkish stance going forward, details of which could be revealed in today's meeting minutes.

The economic data from the Eurozone continues to surprise to the upside. Unemployment levels were seen improving just earlier this week. With the German elections done with and with the incumbent Chancellor Merkel set to govern for another 4-year term, the political risks for the Eurozone have faded in the short term.

Focus will shift to the economic developments and growth which could see the ECB making an appropriate policy response. Based on the above, today's forex binary signal is EURJPY.

The currency pair has been supported in the short term above 132.33 but there is scope for a lower high to be formed here. The Japanese yen is expected to maintain its strength in the near term. As a result, a breakdown below 132.33 could signal in further declines. But note that this is a major support level as well.

Therefore, we are looking to purchase daily CALL options at 132.33 for a 20:00 GMT expiry time. We expect EURJPY to potentially rebound off this support to close higher on the day.

binary options signal eurjpy 05 Oct 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.