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EUR/USD binary signal - ECB Monetary policy meeting - 20 Jul 2017

Signal details
Entry Price: 
1.1475
Close Price: 
1.1628
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 3 ratings

The European Central Bank will be meeting today for its monthly monetary policy meeting. According to experts and economists, no changes are expected to the ECB's interest rates and QE purchases at today's meeting. Focus will of course turn to the ECB's forward guidance and the measures the central bank will take at the meeting in September.

The markets will be volatile today as the ECB holds its monetary policy decision which is followed later by ECB President, Mario Draghi's press conference. While interest rates and QE are expected to remain steady today, the central bank is widely expected to announce another round of tapering to its QE purchases.

Expectations are rife that the ECB chief, Draghi will announce a further 20 billion euro cut to the central bank's bond purchases. This would effectively bring down the ECB's bond purchases from the current 60 billion euro to 40 billion euro. This is exactly half the amount of bonds the central bank began purchasing since it started its QE program to lift inflation in the eurozone.

Recent statistics have shown that the economic recovery in the eurozone is firmly entrenched. Growth is expected to return this year. However, inflation concerns remain. According to the ECB previous projections, inflation in the eurozone is not expected to hit 2% until next year.

However, recent data has shown that inflation has been steadily rising, suggesting that higher consumer prices are likely to come by. The ECB officials have been slightly hawkish on their outlook and thus the monetary policy is also expected to be hawkish.

Based on the above, today's binary options trade recommendation is EURUSD. The currency pair was seen rising above $1.1500 this week. But we expect to see some near term retracement.

Therefore, we purchase daily CALL options in EURUSD at 1.1475 for a 20:00 GMT expiry time. We expect EURUSD to bounce off the support level at 1.1475 and eventually close higher on the day.

binary options signal 20 Jul 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. 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.