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EUR/USD binary signal - FOMC Member speeches - 22 May 2017

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Entry Price: 
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Expiry Time: 
20:00 GMT
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FOMC members, Patrick Harker, President of the Federal Reserve Bank of Philadelphia and Neel Kashkari, President of the Federal Reserve Bank of Minneapolis are two FOMC voting members who will be speaking today. Given the lack of economic reports today, the two speeches are likely to stand out ahead of the June FOMC meeting, where the potential for interest rates is likely 50 - 50.

The Fed speeches come ahead of the meeting minutes from the May FOMC meeting which will be released this Wednesday. Fed officials kept interest rates unchanged but signaled that a rate hike was needed in the near term. However, the interest rate probability has fallen sharply in the past weeks.

Fed member, Harker is a hawk while Kashkari has voted multiple times to keep interest rates unchanged, putting him into the dovish camp. Combined, both these members' speeches are likely to remain balanced.
The U.S. dollar which took a beating last week is also looking to the Fed speeches in hopes of a rebound. Failure to do so could keep the U.S. dollar strongly subdued and push the greenback to fresh lows.

The uncertainty from Washington is also likely to continue to contribute to the weakness in the USD. The EURUSD touched a fresh 6-month high on Friday, rising to 1.1200 briefly by Friday's close. The euro was the most bullish this year and especially in the last week, price posted a strong reversal after headwinds from the eurozone's political landscape faded.

Based on the above factors, today's binary trading signal recommendation is to purchase daily PUT options in EURUSD as we expect to see some moderation to the rally from next week and following the test of resistance at 1.1200.

Therefore, purchase daily PUT options at 1.1200 for a 20:00 GMT expiry time as we expect to see the euro pull back after making another attempt at testing the 1.1200 resistance level. Following this test, we can expect to see a weaker close in EURUSD today.

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.