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GBP/USD trading - Fed interest rate decision - 15 Mar 2017

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GBP/USD trading chart 15 Mar 2017
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Investors awaiting the Fed decision

In the UK, the leading index increased by 0.4% in January, but the data no longer affected the market in the current situation. In the US, the producer price index added 0.3% in January against the expectations of 0.2%, but this didn’t attract investors' attention.

Today, more important economic indicators are emerging

In the UK, a positive trend is expected in the labor market. In February, the volume jobless claims are expected to reduce by -5K. The unemployment rate is forecasted to remain unchanged, 4.8%. The average earning index with bonus is expected to be 2.4%. In the US, the core CPI is expected to grow by 0.2% in February. The retail sales can add 0.1%, the core retail sales are expected to increase by 0.2%. The business inventories are expected to increase by 0.3%.

So, we are waiting for the FOMC decision today. We assume two main volatility scenarios. If the rate is maintained, the pound rushes up for several days. Then we will see the consolidation and reflection of investors on the further plans.

In a case of an increase, the large players will continue to buy the pound explaining it with increase in rate already taken into account by the market, but in this case, the growth of the pair GBP/USD will be less. Then the pair GBP/USD will show the medium-term decline until the US debt issue is gaining strength, which can affect the market.

How we trade binary?

At the moment, fixing above 1.2205 with a test of this level already gives a good signal to continue the growth of the pair with a return to 1.2246.

We would buy Call options after an unsuccessful breakdown of 1.2205. In the case of a successful breakdown of the level 1.2205, you can buy Call options after an unsuccessful breakdown of 1.2159. We would buy Put options if the GBP/USD drops below 1.2159.

Asset: GBP/USD
Direction: Call
Target price: 1.2205
Expiry time: 21:00 GMT

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.

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