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USD/JPY binary signal - FOMC Meeting - 03 May 2017

Signal details
Entry Price: 
112.00
Close Price: 
No trade
Direction: 
Low
Expiry Time: 
20:00 GMT
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It is going to be a busy day from the U.S. with economic releases including high impact events such as the ADP's private payroll numbers for the month April, the Institute of Supply Management (ISM) non-manufacturing PMI and the U.S. Federal Reserve's FOMC meeting due later in the day. All these three events will no doubt bring a lot of volatility to the markets.

The FOMC's two-day meeting concludes today and no changes are expected to the Fed's short term interest rates, which remain steady at 1.0%. After March's rather poor performance on the jobs front, alongside the weaker than expected first quarter GDP figures, the FOMC officials are likely to take a cautious stance in releasing today's FOMC statement which could be dovish. Currently, the markets are expecting to see two rate hikes from the Fed but this could come under the scanner.

Therefore, today's FOMC meeting is likely to clear the air as the Fed could either be seen coming out dovish or could simply brush aside the recent weakness in the economy as short term.

USDJPY has been trending higher over the past few weeks with price posting a strong reversal from near the 108.50 levels. On the daily chart, USDJPY managed to close higher on the day but pulled back from intraday highs just below the 112.50 handle. Yesterday's price action in USDJPY also marked a fresh 2-month high in USDJPY. However, there are indications that the upside momentum is slightly bearish despite these short term gains.

On the intraday charts, USDJPY is seen testing the rising trend line but price action is clearly pointing to downside weakness in USDJPY. Therefore, look to purchase daily PUT binary options in USDJPY near 112.00 for a 20:00 GMT expiry time.

With the upside in USDJPY seen struggling near the resistance level we can expect to see a weaker close in the U.S. dollar today with the ADP payrolls, ISM's non-manufacturing PMI and of course the FOMC meeting due later in the day.

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.