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USD/JPY binary signal - FOMC Meeting - 31 Jan 2018

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Expiry Time: 
21:00 GMT
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The U.S. Federal Reserve committee will conclude its two day monetary policy meeting today with the release of the FOMC statement. According to the markets and overnight swap markets, no changes are expected at today's FOMC meeting.

The Fed is expected to keep interest rates steady at 1.50% while continuing with its unwinding of the Fed's balance sheet. Today's FOMC meeting also gains significance as it will be the last meeting that will be chaired by Janet Yellen. The Fed, at the December meeting signaled that it expects to hike interest rates three times this year.

The next FOMC meeting is scheduled for in March under the leadership of the new Fed Governor, Jerome Powell. Considering that this is the first meeting chaired under Powell, we do not expect any rate hikes in March either.

Investors will be focusing on the FOMC statement and the change of language in the statement. The forward guidance will play a crucial role in setting the expectations for the next rate hike from the Fed.

Besides the FOMC meeting, earlier in the day, the ADP private payrolls data will be released. According to the economists polled, the private sector hiring is expected to add 191k jobs during the month of January. This marks a slower pace of job growth compared to the 250k jobs added in December.

Monday's PCE and personal income and spending data also came out modestly better which has tweaked expectations of a hawkish statement from the FOMC today.

As a result, the two main data points will likely bring some volatility to the U.S. dollar. Based on the above today's binary options signal is USDJPY. The currency pair has been consolidating on the medium term basis with support at 108.26 holding up for the moment.

We would purchase daily CALL options at 109.07 for a 21:00 GMT expiry time as we expect to see USDJPY attempting to post a correction and thus closing higher on the day.

binary options signal eurusd 31 Jan 2018

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.