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EUR/USD binary signal - Eurozone Inflation - 16 June 2017

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20:00 GMT
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The European statistics agency, Eurostat will be releasing the monthly inflation numbers today at 0900 GMT. According to the economists polled, inflation in the eurozone is expected to rise 1.4%, while core inflation is expected to rise 0.9%.

A few weeks ago, preliminary data suggested that the consumer prices in the eurozone slipped, rising at a slower rate. This was briefly after core consumer price index rose to 1.2% in April. Most of the gains however came from higher energy prices.

While at the time, the European Central Bank came under pressure to start tightening monetary policy, the central bank officials noted that it was important for officials to see further evidence on inflation, especially core inflation data.

The market pressure slightly dampened after the flash or preliminary inflation report showed that core CPI slipped from 1.2% in April to probably 0.9% in May. Today's data will confirm whether the preliminary inflationary report was right.

An upbeat inflation data could possibly renew the bullish momentum in the markets for the euro as pressure could potentially start to mount on the ECB to tighten monetary policy.

However, a weaker than expected inflation report could possibly see further weakening in the euro. The EURUSD is our recommended binary options signal for today.

The currency pair has been rising strongly in the past few weeks, but after the ECB meeting which was dovish and the Fed which maintained a hawkish stand, the EURUSD continued to fall. Price action has extended below $1.1200 yesterday despite briefly spiking to $1.1300 during the Fed's decision.

Given the technical outlook in the EURUSD, we recommend to purchase daily PUT options in EURUSD at 1.1171. Price action is likely to push modestly higher to test the short term resistance level following which you can expect to see a bearish close towards the end of 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. 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.