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EUR/USD binary signal - U.S. Nonfarm Payrolls - 07 Jul 2017

Signal details
Entry Price: 
1.1400
Close Price: 
1.1404
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 4 ratings

The much anticipated event of the week, the United States nonfarm payrolls data will be released today by the Bureau of Labor Statistics (BLS). The nonfarm payrolls data will be released at 12:30 GMT and is likely to impact a broad range of markets.

According to the economists polled, the U.S. payrolls are expected to rise 175k in June. This is an expectation for a higher jobs report following May's 138k headline number. Expectation for the average hourly earnings is 0.3% on a month over month basis. This is higher than 0.2% that was registered in the previous month. The U.S. unemployment rate is expected to remain steady at historical lows of 4.3%.

The payrolls report will be important for the markets as it will set the expectations for the upcoming monetary policy decisions. Yesterday, the Federal Reserve released its monetary policy meeting minutes. The minutes showed that Fed members were divided on how to go forth with its monetary policy.

Some members were hawkish noting that because the markets were already prepared by the Fed, the central bank should proceed with shrinking its balance sheet which stands at over $4 trillion in bonds that it had purchased. However, some dovish members wanted to wait until there was more evidence that underlying inflation was firm.

Despite the mixed debate, the tone of the FOMC meeting minutes was hawkish. Still, the market participants are not entirely convinced that the Fed could continue with its policy tightening measures which one more rate hike as well as shrinking its balance sheet.

In this aspect, today's payrolls data will be important for the market as it could potentially shape the outcome of what the market thinks about the Fed's plans. A weaker than expected payrolls data, or a slip in the average hourly earnings could no doubt weaken the sentiment in the U.S. dollar even more.

From the above, our recommendation for today's binary options signal is EURUSD. We expect to see price action post short term gains above 1.1400 before pulling back.

Therefore, we purchase daily PUT options in EURUSD at 1.1400 for a 20:00 GMT expiry time. The rally near 1.1400 is likely to be temporary, as EURUSD could be seen reversing the gains quickly and closing lower on the day.

binary options signal EURUSD 07 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.