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USD/JPY binary signal - FOMC Meeting - 13 Dec 2017

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Expiry Time: 
21:00 GMT
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The much anticipated and the final FOMC meeting for the year will be held today. The FOMC will conclude its two day monetary policy meeting by releasing the FOMC statement at 19:00 GMT. This will also include the Fed's staff economic projections as well as an interest rate hike.

The central bank is expected to hike the short term Fed funds rate by 25 basis points at today's meeting. This comes amid the futures markets showing an above 90% probability. Furthermore, last week's economic data showed that the U.S. labor market continued to tighten. This is expected to boost confidence among the FOMC officials.

Today's rate hike will be the second interest rate hike from the Fed and is expected to be one of the last rate hikes chaired by Janet Yellen. Ms. Yellen's term ends in February. The new Fed chair, Jerome Powell is expected to be selected by the U.S. Congress in the near future.

The rate hike has been already priced in. Therefore, the Fed's statement on forward guidance including its projections on the economy will remain a critical part of today's FOMC meeting. There will also be a press conference chaired by Janet Yellen at 19:30 GMT.

Ahead of the Fed meeting, the U.S. inflation data will be coming out. Estimates show that consumer prices in the U.S. accelerated 0.4% on the month. This is higher than October's CPI of 0.1% on a monthly basis. Core CPI is however expected to remain steady at 0.2%.

Today's binary options signal is USDJPY, the currency pair has been trading higher in anticipation of the Fed's rate hike. This comes at a risk of the markets aligning itself to the Fed's forward guidance.

Therefore, we would purchase daily CALL options at 113.00 for 21:00 GMT expiry time. We expect to see that U.S. dollar close bullish as price action briefly dips to the intraday support before closing higher on the day.

binary options signal 13 Dec 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. 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. All risks and coasts associated with online trading are your responsibility.