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USD/JPY binary signal - U.S. producer price index - 09 May 2018

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Entry Price: 
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Expiry Time: 
21:00 GMT
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The United States producer prices index data will be released today at 1:30PM. According to the economists' polled, the U.S. PPI is forecast to rise 0.2% on the month in April. This marks a modestly slower pace of increase of inflation at the factory gate compared to March's rise of 0.3% on the headline PPI.

Core producer prices are forecast to rise 0.2% on a month over month basis. This is a slower pace of increase compared to the previous month's increase of core PPI at the rate of 0.3%. Still, the overall pace of PPI is expected to edge higher on an annual basis.

The PPI data marks an important report as it gives early indications into consumer price pressures and could given an estimate if consumer inflation will increase or decrease. Later in the week, the monthly consumer inflation data will be released which will further validate this view. PPI has been rising steadily and posted strong gains just the month before.

Therefore, it is quite likely that producer prices will signal a continued underlying strength in the overall inflation rate.

The most recent inflation report, which is the core PCE and is the Fed's preferred gauge of inflation showed an increase to 1.9% on an annual basis. However, the recent FOMC statement showed that Fed officials were willing to tolerate an increase in inflation above the 2% inflation target rate.

Based on the above today's binary options signal is USDJPY. The currency pair was seen retracing some of the gains posted earlier. However, the currency pair managed to recover after reaching highs of 109.86.

In the near term, we expect USDJPY to continue to giving up the gains. Therefore, we are looking to purchase daily PUT options at 109.45 for a 21:00 GMT expiry time as we expect USDJPY to close lower on the day.

binary options signal usdjpy 09 may 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.