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EUR/USD Signal - U.S. Inflation - 15 Feb 2017

Signal details
Entry Price: 
1.0550
Close Price: 
1.0601
Direction: 
High
Expiry Time: 
21:00 GMT
Result: 
ITM
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The EURUSD is trading weaker after the Fed Chair; Janet Yellen reiterated her view for interest rate hikes which sent the U.S. dollar higher across the board. Yellen's comments yesterday means that now the March FOMC meeting is a live meeting for an interest rate hike.

However the Fed Chair reiterated that the rate hike decision will be based on the economic indicators. In this aspect, today's inflation report will be key for the markets. Expectations are for the consumer prices to rise 0.3% on a month over month basis while the core CPI is expected to rise 0.2% on a month over month basis. On an annualized basis, this puts the headline inflation rate to 2.4%, up from 2.1% previously.

Besides the inflation report, the U.S. retail sales and the Empire State Manufacturing index data will also be released, all of which could add into the volatility in EURUSD today. However, given the current trend, EURUSD is expected to post further declines down to 1.0550 following which daily CALL options are ideal. Therefore, it is recommended to purchase daily CALL options near 1.0550 for a 21:00 GMT expiry time.

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.