Investor confidence in the eurozone, measured by Sentix is expected to rise to 12.6
Investor confidence in the Eurozone is expected to tick higher to 12.6 after falling to 10.0 in December. The renewed optimism is expected to come after various preliminary indicators suggested a moderate increase in business activity across various sectors. The initial knee-jerk reaction to the U.S. presidential elections, which contributed to the decline in investor confidence a month ago is also expected to fade as prospects of fiscal spending, inflation has put expectations on a high note for the U.S.
In Europe, the recent uptick in inflation which rose above the 1.0% threshold since 2013 is also some cheer while manufacturing and services continues to post modest expansion. Although the pace of economic recovery in the Eurozone is still chugging along quietly, the risks to the downside are showing signs of dissipating. Earlier this morning, Germany’s industrial production figures showed another month of expansion, albeit at a slower than forecast rate of 0.4%.
The EURUSD has been struggling to lift off the lows near 1.0400. Despite some gains that were recorded last week, the euro fell by Friday's close as the U.S. payrolls report showed a strong increase in wages underlining the fact that inflation was more likely to edge closer to the Federal Reserve's 2% inflation target rate. The single currency closed broadly flat last week but the choppy market continues, now into a third consecutive week.
How to trade binary
The 60-minute chart for EURUSD shows prices breaking out from the rising wedge pattern. We expect the declines to stall near 1.0500 - 1.0487, thus purchasing daily PUT options at the current market price of 1.053 - 1.054 offering the best reward for an end of day expiry at 21:00 GMT.
Target price: 1.054
Expiry: 21:00 GMT