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EUR/USD binary signal - ECB Meeting - 26 Oct 2017

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Entry Price: 
Close Price: 
No Trade
Expiry Time: 
20:00 GMT
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The much anticipated European Central Bank monetary policy meeting will be held today at 1145 GMT. Following the announcement of the minimum bid rate which is not expected to change, at 1230 GMT the ECB will be holding a press conference.

Heading into the event, the economists are expecting the European Central Bank to announce a 30 billion euro cut to its quantitative easing program. This is expected to bring the ECB's current bond purchases to half. The tapering is expected to be implemented from January 2018 after the current deal of 60 billion euro a month bond purchases expires end of December.

Investors will be focusing on how the central bank will give its forward guidance. Given the hawkish tapering to the QE, the ECB President Mario Draghi will need to be cautious so as not to excite investors too much. This could risk the euro's exchange rate pushing higher and could result in slower inflation and weaker exports.

The ECB is also expected to give its estimates on the Eurozone's economy. This includes coming up with GDP forecasts as well as inflation estimates in the next three months. The euro has been on a speculative rally bid by investors since June. This came as the ECB President Mario Draghi signaled that the economy was posting a broad recovery.

However, just last week, some ECB officials said that further accommodative monetary policy was needed. While Draghi is expected to meet the market expectations on tapering, a lot of questions remain on the forward guidance. This could potentially bring some volatility to the markets.

Based on the above, today's forex binary signal is EURUSD. The currency pair remains in a range in the medium term. On the intraday basis, the euro was seen attempting to recover some of the declines from last week as price reached back to the resistance level.

With resistance seen at 1.1850, EURUSD is likely to consolidate at this level in the near term. Thus, we purchase daily PUT options at 1.1850 level of resistance as we expect the EURUSD to close lower on the day.

binary options signal eurusd 26 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.