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EUR/USD binary signal - ECB Meeting - 08 June 2017

Signal details
Entry Price: 
1.1275
Close Price: 
1.1217
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
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The European Central Bank's (ECB) monetary policy meeting is scheduled for today. The ECB will be releasing its decisions on the interest rates and its QE program, currently at €60 billion a month. No major changes are expected at today's meeting, although the markets are building up the expectations for a hawkish outcome.

The ECB will also be releasing its quarterly forecasts which includes revisions to the GDP projections as well as inflation over the course of the year. Yesterday, rumors erupted about the possible "draft" forecast. The report showed that the ECB was likely to keep inflation expectations subdued but revise the GDP to the upside.

When the report emerged, the EURUSD saw some volatility. Initially slipping only to recover later in the day on the news that GDP projections would be higher. However, considering that all of this merely speculation, the outcome from today's ECB meeting could be anyone's guess.

Supporting the case for the hawkish expectations is the fact that growth in the Eurozone has stayed firm, especially with Germany. As a result, the ECB is expected to acknowledge this fact. There is also the possibility that the European Central Bank could tweak its language on inflation, shifting from dovish to hawkish. But making this complicated is the fact that the recent flash inflation expectations showed consumer prices slipping after posting strong gains in the first part of the year.

Based on the above factors, we can expect to see a lot of volatility in the EURUSD with decision of the statement unlikely to be clear for the markets. This means that EURUSD could potentially move sideways before the trend resume.

Considering the above factors, our binary options trade recommendation is to purchase PUT options for a 20:00 GMT today. With EURUSD supported above 1.1250, we expect to see some upside momentum before the common currency could fall.

Therefore daily EURUSD PUT options are ideal for a 20:00 GMT expiry time near 1.1275, as price action is likely to fall ahead after the ECB's meeting.

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.