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EUR/USD binary signal - German factory orders - 07 June 2017

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Signal details
Entry Price: 
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Expiry Time: 
20:00 GMT
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The monthly factory orders activity data from Germany is scheduled for release today at 0600 GMT by the German economy Ministry. Economists polled have forecast a decline of 0.2% in factory orders on a month over month basis in April. This follows a strong performance in March where factory orders expanded 1%.

With Germany being the powerhouse of the Eurozone, today's data will likely influence traders especially with the ECB meeting due tomorrow. So far, economic activity in Germany has been strong with the momentum suggesting that growth will likely expand into the year.

This is good news as far as the German and the Eurozone GDP is concerned. In March, data showed that factory orders after adjusting for seasonal swings surged 1%, following 3.5% increase in the previous month. The data for March showed that a brighter consumer spending outlook and increase in new orders helped manufacturers to ramp up production.

Consumer spending, which is a key component to GDP growth has been stronger in Germany, contributing majorly to the economy. Consumer spending is followed by export of goods and services from Germany which also includes both EU and non-EU countries.

Back in March, the economy ministry in Germany called the manufacturing and factory activity as being "vibrant" and painted a positive outlook. A decline in the factory orders today is therefore unlikely to dent the sentiment much. However, traders are likely to remain cautious heading into tomorrow's big ticket items that includes the ECB monetary policy meeting and the UK elections.

Based on the above, our binary options trade recommendation is for the EURUSD which is looking rather subdued. Following the strong gains posted in the past weeks, investors are likely to push the euro lower, booking profits and heading into tomorrow's monetary policy meeting.

This means that EURUSD PUT options are ideal for a 20:00 GMT expiry time as price action is likely to fall ahead of tomorrow's event. Therefore, we would purchase PUT options at 1.1265 in EURUSD as we can expect to see a decline towards the end of the 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.