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GBP/USD binary signal - BoE Meeting - 10 May 2018

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Signal details
Entry Price: 
1.3560
Close Price: 
1.3516
Direction: 
High
Expiry Time: 
21:00 GMT
Result: 
OTM
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The Bank of England will be holding its monthly monetary policy meeting today. The central bank will be releasing its official statement on interest rates at 11:00 GMT. Market expectations show that the Bank of England will leave the interest rates unchanged at 0.5% today.

This is contrary to the previous signals given by the central bank where, as early as March, the central bank said that interest rates are expected to rise sooner than later. The hawkish comments came as consumer prices in the UK eased and there were some signs of pick up in the economy.

However, by end of April economic data showed that the UK's economy was in fact losing momentum. The first quarter GDP report showed that the UK's economy advanced just 0.1% on the quarter. This was after the economy advanced 0.4% in the final quarter ending December 2017.

The lack of any clear signs on wage growth in the UK is also expected to weigh on consumer spending amid higher inflation rates, relatively speaking. As a result, the central bank is expected to remain on the sidelines at today's meeting. There are strong expectations that the BoE will give a cautious statement which could be bearish for the British pound.

Based on the above, today's binary signal is GBPUSD. The currency pair was seen mostly consolidating near the support level of 1.3530 level heading into the BoE meeting. With the support level holding strongly, we expect to see a rebound in prices.

Therefore, we would purchase daily CALL options at 1.3560 for a 21:00 GMT expiry time. Although the Bank of England is expected to hold rates today, the forward guidance with the potential to signal a rate hike in August remains higher. As a result, the GBPUSD currency pair could be seen closing higher on the day.

binary options signal gbpusd 10 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. 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.