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USD/JPY binary signal - U.S. CPI data - 14 Sep 2017

Signal details
Entry Price: 
110.18
Close Price: 
No Trade
Direction: 
High
Expiry Time: 
20:00 GMT
How we trade
5/5 of 3 ratings

The U.S. consumer prices index data for the month of August will be released today at 12:30 GMT. According to the economists polled, expectations are that consumer prices in the U.S. might have increased during the month. The headline CPI for August is expected to rise 0.3% on a month over month basis while core PPI is expected to rise 0.2% on the month. This would mark a significant increase from the previous month which saw CPI rising 0.1% on both headline and core.

An increase in CPI data could potentially suggest that inflation on the consumer side will also increase in the coming months. Yesterday's PPI data suggested a modest increase in inflation at the factory gate.

The U.S. inflation has remained tricky. Earlier in the year, consumer prices rose to 1.8% before easing back. Last month consumer price index managed to rise 1.8% reaching the levels from February this year. Still, consumer prices are below the Fed's 2% target rate. The Fed's preferred gauge of inflation, the core PCE data was also seen consolidating below the 2% inflation target rate.

Fed officials have remained mum on the inflation data so far with some suggesting that the central bank will be patient enough to wait until inflation starts to rise again. Today's PPI data comes ahead of the consumer price index data due tomorrow. Both these reports comes ahead of the FOMC meeting due next week. No changes are expected to interest rates, but the increase or acceleration in inflation for a second month could certainly boost hopes of another rate hike from the Fed.

The central bank has maintained that it hopes to raise rates one more time this year. However, given the recent pace of economic growth, weak inflation and uncertainty on the political front, investors have been scaling back their bets. That could however change if there is evidence that inflation is once again on the forefront.

Based on the above, today's binary trading signal is USDJPY. The currency pair has regained some bullish momentum, but we expect a near term dip ahead of further gains with price at resistance.

Therefore, we purchase daily CALL options at 110.18 for a 20:00 GMT expiry time. We expect USDJPY to post a modest decline following which the currency pair should be aiming to close higher on the day.

binary options signal usdjpy 14 Sep 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.