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GBP/JPY binary signal - UK Inflation report - 18 Jul 2017

Signal details
Entry Price: 
146.85
Close Price: 
146.14
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 2 ratings

The UK's Office of National Statistics (ONS) will be releasing the monthly inflation report today at 0330 GMT. According to economists polled, inflation rate in the United Kingdom is expected to rise 2.9%, rising at the same pace as the month before in May.

The UK's core inflation rate, which strips out the volatile food and energy prices is also expected to rise 2.6%, the same pace of increase as the month before. Inflation will play a key role in influencing the British pound's exchange rate volatility today.

The Bank of England has signaled that interest rates could rise if inflation continues to remain above the central bank's 2% inflation target rate. While the central bank expected this overshoot of inflation into the second half of the year, consumer prices have increased sharply, catching the central bank officials by surprise.

Last week, officials from the BoE's monetary policy committee commented that interest rates should begin to rise along with the central bank removing its asset purchase program. This has kept the British pound support to the upside.

Later this afternoon, the Bank of England governor, Mark Carney is also expected to speak. If inflation surprises to the upside, then Carney will no doubt turn very hawkish on the central bank's monetary policy forward guidance.

Last week we saw that the UK's average earnings slowed to a pace of just 1.8%. This was down from 2.1% that was seen the month before. The difference between wages and inflation turned negative suggesting a squeeze on UK's household income.

Based on the above data, today's binary options trade recommendation is GBPJPY. The currency pair has been in a steady uptrend but resistance at 147.55 has remained strong keeping the currency pair biased to the downside.

We purchase daily PUT options in GBPJPY at 146.85 for a 20:00 GMT expiry time. A break down below this price level will see GBPJPY potentially retracing the current gains made. We expect to see this pull back eventually send GBPJPY to close lower on the day.

binary options signal gbpjpy 18 Jul 2017

Comments

Bettercall's picture

Great signal, deep into the money :) Thank you Toni! I appreciate your work!

Bettercall

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.