Yesterday's statements by officials set the tone for the market
Yesterday, as we expected, the price was moving not under the influence of fundamental data, but under the influence of statements by officials. At first, Mario Draghi had a speech, Mark Carney followed him, then Patrick Harker joined them, and Janet Yellen completed the information day.
Consider the chronology of events
In the middle of the day, the ECB President Mario Draghi announced the gradual growth of the eurozone economy and once again reiterated that the forthcoming reduction of monetary incentives will be very gradual.
The Bank of England provided a report on financial stability. Mark Carney was concerned about the growth of unsecured loans. Now the conditions for issuing loans should be tightened. Commercial banks were ordered to increase reserves by 0.5% during the year. In Scotland, it was decided to postpone the second referendum on independence from England until 2018, until the conditions for the UK's withdrawal from the EU become clear.
The representative of the Federal Reserve, Patrick Harker, said that the US economy doesn’t need large-scale stimulation, and didn’t refuse another rate hike this year. Harker put forth a thesis, which clearly contradicts even the new US budget plan.
The head of the Federal Reserve, Janet Yellen, stated about the very solid foundation of the largest American banks and expressed her conviction that the new financial crisis, like 2008, will no longer be. She sees the positive outlook for inflation.
Today, at the conference in Portugal, Mark Carney, Stephen Poloz (CB of Canada), Haruhiko Kuroda (Central Bank of Japan), will have speech. We don’t understand the purpose of yesterday's extraordinary growth of counter-dollar currencies, while the geopolitical situation worsens. Just yesterday, the US and France agreed to deal a massive blow to Syria in the case of "another chemical attack of the Assad regime."
In the current situation, the pair GBP/USD is likely to continue growing to 1.2965.
How we trade binary?
We are watching to buy Call options after correction of the GBP/USD at 1.2797-90, in the case of false breakdown there. In the case of a sharp increase to the highs of the previous day in the area of 1.2827, we can also purchase Call binary options in order to update the high of yesterday at 1.2856.
Sellers need to gain a foothold below 1.2790, which will lead to a downward correction in the support area of 1.2761.
We are looking to purchase Put binary options with 20:00 GMT expiry if a one hour candle closes below the 1.2780 level. If our first target is not reached and the price breaks our resistance level at 1.2827, the first scenario would be invalidated. We would buy Call options if a one hour candle closes above the 1.2827 level. We also buy Call options in the case of false breakdown 1.2790.
Target prices: 1.2827 (Call) or 1.2780 (Put)
Expiry time: 20:00 GMT