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GBP/USD Trading - US federal budget balance - 12 Jan 2017

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GBP/USD chart 12 Jan 2017
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The US dollar weakened during Donald Trump press conference.

The press conference of Donald Trump was emotional. He promised to become the world's greatest creator of jobs. The stock markets went up, but the US dollar weakened after the initial reaction.

We believe yesterday's weakening of the US dollar was speculative, so we maintain scenario of the medium-term strengthening of the dollar

Yesterday, Donald Trump also said that he will make the world respect America, so it means the strong US dollar. Maybe yesterday's weakening due to the risk of investors about the impending abolition of the health insurance system ObamaCare.

In the UK, the economic data came out mixed. In November, the industrial production increased by 2.1% against the expectations of 0.8%. The manufacturing production added 1.3%, but the construction industry fell by 0.2%. The GDP forecast from NIESR was 0.5%, as a month earlier.

Today during the Asian session, the Cable shows the growth. In the evening, the Fed epresentatives: Ch.Evans, P.Harker, D.Lokhard, D.Bullard, R.Kaplan will have speech. We expect the neutral speech. The federal budget balance will also be published. The forecast -25.0 billion against -137 billion in November.

How to trade binary

The buyers are limited by the resistance level of 1.2258, which didn’t allow to form an uptrend yesterday. The breake of this level will give a chance for continued growth to 1.2280.

The sellers will try to return to the area of 1.2206. Only after that we can consider the next downward correction in the area of 1.2160. We would buy Put options if the pair falls below 1.2206. This scenario would be invalidated if the pair goes above 1.2258, in which case we would go for Call option with the end of the expiry.

Asset: GBP/USD
Direction: Put
Target price: 1.2206
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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