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GBP/JPY binary signal - UK Inflation - 23 May 2018

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Signal details
Entry Price: 
Close Price: 
No trade
Expiry Time: 
21:00 GMT
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The United Kingdom will be releasing the monthly inflation report today at 0830 GMT. The data, which will be released by the UK's Office for national statistics (ONS) will cover the period of April.

According to the economists polled, the annual inflation rate ending April 2018 is expected to remain steady at 2.5%. Core inflation rate which excludes the volatile food and energy prices is forecast to rise at a slower pace of 2.1% for the same period.

If actual data matches estimates of if inflation falls further below the median estimates, this could be a bullish sign as the markets will quickly start to raise the bets on the Bank of England's rate hike.

The central bank was initially tipped to increase rates at the recently concluded monetary policy meeting this month. However, due to the weak patch of economic data in the first quarter, the BoE held back from hiking rates and gave a cautious forward guidance.

Regardless, officials maintained that the UK's economy will bounce back and expect inflation to fall over the months as well. This comes amid last week's jobs report showing that real wages, which exclude inflation started to finally turn positive.

Therefore, if the data is positive, we could expect to see some volatility in the markets as investors start to adjust their expectations on interest rates.

Based on the above, today's binary trading signal is GBPJPY. The currency pair was seen posting losses earlier in the day. However, the intraday charts show the formation of a bearish flag pattern. In the near term it is ideal to purchase daily PUT options on an intraday retracement to 148.80 for a 21:00 GMT expiry time.

We expect to see GBPJPY retrace to the short term resistance level of 148.80 before closing lower on the day.

binary options signal gbpjpy 23 may 2018

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.