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GBP/JPY binary signal - UK Inflation data - 13 Feb 2018

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Expiry Time: 
21:00 GMT
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The UK's Office for National Statistics will be releasing the monthly inflation figures today at 09:30 GMT. According to the economists polled, consumer prices in the UK are expected to slow for a second consecutive month in January. Estimates show that headline CPI in the UK rose only 2.9% on an annual basis in January. This marks a slight decline from 3.0% increase registered in December.

Consumer prices in the UK touched 3.1% in November just around the time when the Bank of England hiked interest rates by 25 basis points. This was the first rate hike in nearly a decade and a first after the June 2016 Brexit vote. The purpose of hiking interest rates came as the UK's inflation remains stubbornly above the central bank's 2% inflation target rate.

Recently, the Bank of England signaled that interest rates could rise faster than expected. Investors were initially pricing in a BoE rate hike in August, but this could come as early as May this year. For the moment, the central bank is expected to push forth with at least two rate hikes this year.

Despite the hawkish tone from the central bank, the Brexit uncertainty will weigh on the market. The fact that UK could potentially leave the EU with no trade deal in hand could impact the UK's economy which has so far managed to remain resilient.

Based on the above, today's binary trading signal is GBPJPY. The currency pair came under pressure last week with the Japanese yen strengthening across the board on a broader market sentiment.

Although the currency pair has been drifting lower, we expect to see some near term bounce. Therefore, we would purchase daily CALL options at 149.47 for a 21:00 GMT expiry time. We expect GBPJPY to rebound off this support level to close higher on the day.

binary options signal gbpjpy 13 feb 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.