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USD/JPY binary signal - U.S. Nonfarm payrolls - 01 Sep 2017

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Expiry Time: 
20:00 GMT
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The U.S. Bureau of Labor Statistics will be releasing the monthly jobs report today at 12:30 GMT. According to the economists polled, the median estimates point to the U.S. economy adding 180k jobs for the month of August. The U.S. unemployment rate is expected to remain unchanged at 4.3%, while wages are expected to rise 0.2%, slightly lower than July's 0.3%.

Following the ADP report and the GDP numbers which were revised higher, the markets have turned bullish on the U.S. dollar once again. This was further accentuated by the fact that the Fed's preferred gauge of inflation, the personal consumption expenditure or PCE index rose 0.1% as expected.

However, there were some weaknesses still as the personal spending rose just 0.3% missing estimates of a 0.4% increase. Personal income however rose 0.4%, more than the estimates of 0.3% for July.

Based on the strong ADP jobs report numbers, today's payrolls numbers could be seen higher than 200k on average. However, there is scope for a disappointment. Still, a better than expected headline payrolls report will not doubt help the U.S. dollar to recover some of the losses.

The economic data will play a crucial role as the markets head into September. With the Federal Reserve likely to announce its balance sheet reduction program, focus will be on the forward guidance. So far, markets have been doubtful that the Fed will be able to hike rates one more time this year. Based on the jobs data, this could potentially change.

Although inflation remains weak in the U.S. the unemployment data is quite strong which suggests that the Fed will overlook the temporary blip in consumer prices.

Based on the above data, today's binary options signal is USDJPY. The currency pair has been posting strong gains as it approaches the resistance level of 110.72. But the reversal has occurred before USDJPY could test this level.

Therefore, we would purchase daily CALL options at 109.65 for a 20:00 GMT expiry time. We expect that after a retest of support at 109.65, USDJPY will be looking to close higher on the day.

binary options signal usdjpy 01 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. 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.