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NZD/USD binary signal - U.S. Consumer price index - 14 Jul 2017

Signal details
Entry Price: 
0.7300
Close Price: 
0.7345
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 3 ratings

The United States Consumer prices index data will be released today at 12:30 GMT. According to economists polled, consumer prices are expected to rise 0.1% on a month over month basis. This would reverse the 0.1% decline posted in the previous month. Core CPI, which excludes food and energy prices is also forecast to rise 0.2%, increasing slightly from 0.1% posted previously.

On a year over year basis, the headline CPI is expected to rise just 1.7% in the month of June. This is below May's 1.9% increase and marks a decline off the Fed's 2% inflation target rate. Core CPI is also expected to rise 1.7% on a year over year basis, rising at nearly the same pace as the month before.

The consumer price index data will be crucial for the markets given the fact that the U.S. Federal Reserve has not yet sent any clear signals on when the next rate hike will occur. The Fed, according to the testimony from Janet Yellen showed that the central bank remains optimistic that inflation will rise in the near term.

This optimism comes from the fact that the tightening labor market situation will eventually start to put pressure on wages and inflation. As a result, consumer prices are expected to increase. However, for this to happen there needs to be evidence of a pickup in wages. The U.S. average wages has remained broadly flat near 2.5% on a year over year basis.

The short term effects of higher oil prices which contributed to the increase in the U.S. inflation rate were also seen to be dissipating. As a result, wages are likely to remain key for any evidence that inflation will rise back to the Fed's 2% target rate.

Based on the above, today's binary options signal recommendation is NZDUSD. Price action has been rallying strongly but we see a lower high forming yesterday. Therefore, we purchase daily PUT options at 0.7300 for a 20:00 GMT expiry time.

Following the lower high that was formed, NZDUSD could be looking to retrace the gains made earlier. Therefore, we expect to see the currency pair closing lower on the day.

binary options signal nzdusd 14 Jul 2017

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.