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EUR/USD binary signal - ECB Draghi Speech - 29 May 2017

Signal details
Entry Price: 
1.1170
Close Price: 
1.1171
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
OTM
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The markets today are looking to a soft open with the United States and the UK markets closed because the respective bank holidays. Still, the European markets are working and while there is lack of any clear fundamentals scheduled for today, ECB President Mario Draghi will be testifying to the European parliament in Brussels.

Mr. Draghi is expected to defend the central bank's monetary policy actions to European lawmakers, as he successfully did just a few weeks in Netherlands, where he came under pressure from the Dutch lawmakers. The ECB has been coming under pressure to wind down its asset purchases and to tighten monetary policy.

In a bid to boost growth and inflation, the ECB has been purchasing monthly sovereign bonds to the tune of 60 billion euros. This is expected to continue into end of December for the rest of 2017. However, recent economic data from the eurozone has shown a broad pickup in activity in the region.

Inflation in the eurozone has also started to rise which is one of the main reasons alongside the uptick in GDP growth for policymakers calling for the ECB to scale back its asset purchases. However, ECB officials are not yet convinced that the recovery seen in the eurozone is firm. Thus, officials have maintained that they will continue to keep the monetary policy steady at the current pace. Officials from the central bank also noted the risks of a premature exit to the loose monetary policy.

This has repercussions both fundamentally as well as credibility. The ECB's next meeting is coming up in June where the central bank will also give fresh economic forecasts for the near term. This could potentially bring some upside revision to the European markets growth and inflation prospects.

Based on the above factors, today's binary options trading signal is EURUSD. With price, likely to push lower, we prefer daily PUT options for a 20:00 GMT expiry time. Look for EURUSD to post a modest bounce near 1.1170 where purchasing daily PUT options will be ideal as EURUSD is expected to close lower on the day.

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.