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EUR/GBP binary signal - UK Inflation - 12 Sep 2017

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Signal details
Target Price: 
0.9145
Close Price: 
No trade
Direction: 
Put
Expiry Time: 
20:00 GMT
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The United Kingdom's Office for National statistics (ONS) will be releasing the monthly inflation report today at 0830 GMT. According to the economists polled, consumer prices in the UK are forecast to rise 2.8% on a year over year basis in August. This shows a slight acceleration from 2.6% increase registered the month before. The UK's consumer prices were seen easing back in July but prices are expected to climb in August.

The core consumer price index which strips the volatile food and energy prices are also forecast to rise 2.5% in August. This is slightly higher from the 2.4% increase registered in July. Producer prices, which stayed flat the month before is expected to rise 1.2% on the input and 0.2% on the output. Last month PPI input and output remained broadly flat.

This potentially suggests some downside risks to consumer prices in the UK. Added to this, the British pound was also seen trading fairly stable over the past month which could mean that consumer prices might have increased only slightly.

The CPI data coming out today will be crucial as it comes ahead of this Thursday's Bank of England meeting. The BoE is not expected to make any major changes to interest rates or the central bank's QE purchase program. Still, an upside surprise in inflation could put pressure on the BoE to come out with hawkish forward guidance.

Later in the week, the UK's monthly jobs data could also be another crucial factor that will be taken into consideration by the central bank. Wage growth has remained subdued in the UK which raised the risk of hyper inflation. However, with wages forecast to rise, this could potentially offset the increase in consumer prices.

Based on the above, the binary options signal for today is the EURGBP currency pair. The currency pair formed an outside bar last Friday and price action was subdued following which price action broke through Friday's range. We expect to see a pull back towards 0.9145.

Therefore, we would purchase daily PUT options at 0.9145 for a 20:00 GMT expiry time. We expect to see EURGBP potentially post a downside breakout and close lower on the day.

binary options signal 12 Sep 2017

Comments

fafza's picture

Looks like it's not going to reach the target price.

fafza
Toni H.'s picture

Yep, sometimes is like that )))

Toni H.

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.