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EUR/USD binary signal - U.S. Empire State Manufacturing - 15 May 2017

Signal details
Entry Price: 
1.0900
Close Price: 
1.0977
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 4 ratings

The New York Federal Reserve is expected to release its monthly Empire State manufacturing index data for the month of May. Economists polled are expecting to see the manufacturing activity in the New York area to rise 7.6, from 5.2 that was registered a month ago.

In April, manufacturing activity fell by nearly eleven points to 5.2. It marked a second consecutive monthly decline in manufacturing activity after the index rose to 18.2 in February this year which was a 2-year high. The moderation was expected after manufacturing activity showed a strong pick up this year.

In April, the new orders index which signals the potential work orders for new jobs in the manufacturing sector was also weaker, retreating to 7.0. This indicated that after an initial surge, the manufacturing sector was moderating. The NY Fed's Empire state manufacturing index is a key forward looking indicator that has wide and far reaching implications in signaling how the economy is likely to perform.

If as expected, we get to see a pick up in the manufacturing sector in the New York area, this could potentially build expectations of a rebound in the national manufacturing activity, as measured by the Markit's manufacturing PMI as well as the Institute of Supply Management (ISM's) gauge of national manufacturing activity.

Despite some weakness in the first quarter, the Fed officials have brushed aside the slowdown in the GDP, calling it transitory. The central bank is currently expected to hike short term interest rates by another 25 basis points when it meets in June. However, this rate hike to begin to look doubtful if the manufacturing activity starts to post a third month of decline.

For today's binary options trading signal our recommendation is for EURUSD. Purchase daily CALL options in EURUSD at 1.0900 for a 20:00 GMT expiry, on the pull back. This will potentially keep EURUSD on the bullish track for further gains to the upside as the U.S. dollar is looking weaker currently.

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.