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USD/JPY binary signal - U.S. Revised GDP estimates - 29 Nov 2017

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Entry Price: 
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No trade
Expiry Time: 
21:00 GMT
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The U.S. Bureau of economic analysis will be releasing the second revised gross domestic product (GDP) estimates today at 13:30 GMT. The data covers the third quarter ending September 2017. According to the economists polled, GDP in the U.S. is expected to be revised higher to 3.3%. This would see the third quarter GDP rising higher than the initial estimates.

In October, the preliminary GDP estimates showed that the U.S. economy expanded at a pace of 3.0% during the quarter ending September. This beat forecasts of a 2.6% increase. The previous second quarter GDP was also revised higher from 3.0% to 3.1% at final revision.

This pace of increase is expected to show that the U.S. economy has been steadily expanding despite all the uncertainty surrounding global trade and weak pace of inflation. Although the U.S. labor market has tightened significantly, wage growth had remained weak or stable at best.

The revised GDP estimates are likely to add another point for the Fed as it looks to hike interest rates this year. The next FOMC meeting is scheduled for in December where central bank officials are expected to raise the short term Fed funds rate to 1.25% - 1.50%.

This is seen as a steady path toward normalization. The central bank has also started unwinding its balance sheet since October this year and the size of unwinding is expected to increase every three months.

A higher GDP revision will therefore be bullish for the U.S. dollar. Based on the above, today's binary options trading is USDJPY. The currency pair was seen attempting to bounce off the support level that was formed near 110.90 level.

Earlier today, price action was seen testing the previous resistance level established at 111.65. We expect a modest pull back to 111.30 following which, the upside momentum could be formed. Therefore, we would purchase daily CALL options at 111.30 for 21:00 GMT expiry time as we expect USDJPY to close higher on the day.

binary options signal usdjpy 29 Nov 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.