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EUR/USD binary signal - ECB Meeting - 25 Jan 2018

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Expiry Time: 
21:00 GMT
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The European Central Bank will be holding its monetary policy meeting today at 12:45 GMT. This will be followed by the ECB's press conference that will be held at 13:30 GMT.

The market expectations point to the fact that the European Central Bank will be leaving its key interest rates unchanged at today's meeting. The central bank is also expected to leave its QE purchases unchanged at a pace of 30 billion euro per month. The central bank last cut its QE purchases in October last year and the new pace of bond purchases came into effect from January.

With lack of any key changes to monetary policy, investors will be looking to the ECB's statement for any clues on forward guidance. This gains importance as the ECB's meeting minutes from December revealed that policy makers discussed about tweaking the language of the central bank's statement. According to the minutes, many policy makers wanted to the ECB to start to slowly guide the markets towards a tightening. The ECB's bond purchases are set to end in September this year.

The market speculation is that the ECB could soon start to point towards policy normalization. Although interest rate hikes are still a far away off, the ECB is expected to prepare the markets initially for an end to its bond purchases or QE program. The ECB is expected to start hiking rates only from the latter half of 2019.

Despite the hawkish undertones, some of the ECB's policy making members have also voiced concerns on acting too soon. This comes from the ECB's vice-president Vitor Constancio who recently commented that with the decline in inflation over the past month, there was no need for the ECB to turn hawkish. His comments impact the euro currency that it briefly fell on his remarks.

Today's binary options signal is EURUSD, the currency pair has posted strong gains in the last 24 hours. The gains came on a weaker USD. However with the EURUSD trading at a 4-year high, the risks for the ECB to talk down the currency is building up.

Therefore, we are looking to purchase daily PUT options at 1.2425 for a 21:00 GMT expiry time. We expect the currency pair to retreat from the current highs and close lower on the day.

binary options signal eurusd 25 Jan 2018

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.