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GBP/JPY binary signal - UK Manufacturing production - 10 Oct 2017

Signal details
Entry Price: 
148.00
Close Price: 
148.44
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
OTM
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The UK's office for national statistics (ONS) will be releasing the monthly manufacturing and industrial production numbers for the month of August at 08:30 GMT today. According to the economists polled, manufacturing production is expected to rise 0.3% on the month over month basis. Industrial production is expected to rise 0.2% on the month while construction output is expected to rise by 0.1% in August.

The numbers are slightly below average with manufacturing production seen slowing while construction output is expected to post a modest increase after significantly falling in July. Construction activity was seen declining 0.9% on the month in July. Industrial production is however expected to maintain a steady pace of expansion of 0.2%.

The economic data that covers the manufacturing, construction and industrial output sectors is broadly expected to show a slowdown. Even a beat on the estimates is unlikely to convince the markets much especially after data for September shows that all three sectors witnessed a slowdown. Especially the construction sector was hard hit due to the contraction it witnessed just a month ago.

Investors are expecting for another slow quarter in the UK as witnessed by the latest forward looking PMI indicators. As a result, today's manufacturing, construction and industrial output figures are unlikely to change this conviction. With Brexit theme continuing to play in the background, the markets are expected to see this overshadow the economic indicators.

There is however the risk of the Bank of England which is expected to hike interest rates at its next monetary policy meeting in November. However, this could play out either way with growth slowing and the central bank hiking rates solely to control inflation which has remained above 2% target.

Based on the above, today's forex binary signal is GBPJPY. The currency pair was seen breaking below 150.05 last week which validated the descending triangle pattern. After falling to 148.23, the declines completed the downside measured move and closed below 148.23.

We purchase daily PUT options at 148.00 for a 20:00 GMT expiry time. We expect to see the currency pair pushing lower following the test of the resistance level.

binary options signal gbpjpy 10 Oct 2017

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.