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USD/JPY binary signal - US Revised Q1 GDP - 26 May 2017

Signal details
Entry Price: 
111.70
Close Price: 
No trade
Direction: 
High
Expiry Time: 
20:00 GMT
How we trade
5/5 of 4 ratings

The United States, Bureau of Labor Statistics (BLS) will be releasing the second revised estimate for the first quarter gross domestic product (GDP) numbers today at 1230 GMT. Economists polled are expecting the revised GDP to be higher from the initial estimates of 0.7%, to 0.9%. While GDP growth will still be slower, it would definitely mark a strong revision from the initial estimates.

The Federal Reserve just this week released its meeting minutes where members brushed aside GDP growth numbers in the first quarter calling it temporary. The advance GDP figures for the second quarter is seen to be tracking at 4.1% already, meaning that the first quarter revised numbers could at best will cause but a knee-jerk reaction in the market.

However, in the event of a miss on the estimates, as it happened with the UK's second revised estimates on the first quarter GDP, which was revised lower, the U.S. dollar could come under pressure as the weak data could raise questions on whether the Fed will be able to hike interest rates in June (next month).

The first quarter in the United States is seasonally known to be one of the weakest periods of quarterly growth. However subsequent revisions have often led to a modest increase from the initial estimates which are usually under reported. As a result, there is a strong chance that today's GDP numbers will be higher than the first estimates.

Based on the above data, we recommend for today's binary options trading signal to trade USD/JPY. The markets are currently in a risk off sentiment and the USD/JPY daily chart shows a strong bearish flag pattern being formed. However, there is scope for price action to invalidate this chart pattern in the near term. Therefore, look for a short term breakout above 111.70 to purchase daily CALL options in USDJPY as the price action could see a move towards 112.110, for a 20:00 GMT expiry time.

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.