Yesterday, the US published positive macroeconomic data
In April the ADP nonfarm employment change showed 177K after the March 255K. The April Services PMI showed 53.1 against the forecast of 52.5. The ISM Non-Manufacturing PMI was 57.5 against the forecast of 55.8.
The FOMC statement cheered the market
The statement was optimistic. FOMC noted the positive dynamics in the labor market and the slow movement of inflation to the target level of 2.0%. The growth is spending and investments in business were optimistic. The Committee considers the weak economic growth in the first quarter as a temporary phenomenon. The text of the statement strengthened investors in the opinion that the rate will be increased in June. The current expectation of an increase in June is 71.0%.
Today, the UK will publish data on Services PMI for April, which is forecasted at 54.5 against 55.0 in March. The number of mortgage approvals is expected to be 67K vs. 68K in February. The net lending to individuals is expected at 4.5 billion pounds sterling against 4.9 billion a month earlier.
In the US, the factory orders are expected to grow by 0.4%. The negative can be caused by the March trade balance, which is expected at -44.5 billion dollars - this is a fairly high negative March balance in the entire post-crisis period, although markets often ignore this data.
We expect the pair GBP/USD in the area of 1.2760.
How we trade binary?
In our view, the price will continue downward if reach 1.2865 level. We would buy Put binary options if a one hour candle opens and closes below the 1.2865 level. If our first target is not reached and the price goes above 1.2910, the first scenario would be invalidated. We would buy Call options if a one hour candle opens and closes above the 1.2910 level.
Target price: 1.2865
Expiry time: 20:00 GMT