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USD/JPY binary signal - U.S. CPI - 13 Oct 2017

Signal details
Entry Price: 
112.18
Close Price: 
111.87
Direction: 
High
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 5 ratings

The U.S. inflation figures data for the month of September will be released today at 12:30 GMT. According to the economists polled headline consumer prices in the U.S. are forecast to rise 0.6% on the month, accelerating from 0.4% in August. Core consumer prices are expected to rise 0.2% in September, maintaining the same pace of increase from August.

On a year over year basis, headline consumer prices are expected to rise above the 2% threshold. This would put the inflation rate in September above the Fed's 2% inflation target rate. However, this wasn't the first time as inflation previously increased above 2% before easing back.

As a result, an expected spike in consumer prices is unlikely to garner much attention in the markets. Secondly, considering that the Federal Reserve looks at the PCE price index, which is still below 2%, the CPI data is unlikely to signal any changes to the Fed's monetary policy. The central bank is expected to hike interest rates in December and an increase in inflation will only validate these views further.

The increase in consumer prices is expected to come amid the hurricanes that hit the U.S. during the period. Prices are therefore expected to rise. The main focus will be whether inflation will be able to sustain these levels going forward. There is a high likelihood that consumer prices could soon ease back in the coming months.

Besides the inflation data, the U.S. retail sales numbers are also expected to be released simultaneously. Economists expect core retail sales to rise 0.9% on the month, accelerating from 0.2% previously while headline retail sales is expected to rise 1.7% on the month after declining 0.2% previously.

Combining the last two, there is a strong chance that the data could be positive for the U.S. dollar. However, the risks are also to the downside. Based on the above, today's binary options signal is for USDJPY.

The USDJPY has been trending lower but we expect a pullback in the near term. Therefore we purchase daily CALL options at 112.18 for a 20:00 GMT expiry time. Although USDJPY is trading sideways on the lower time frame charts, we expect price to close higher on the day.

binary options signal usdjpy 13 Oct 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.