On Wednesday, the FOMC raised the base rate by 0.25%, to 1.25%
The pair GBP/USD showed high volatility but actually lost about 5 points per day. This is because the event was quite expected.
Yesterday the weak US data on retail sales and inflation shocked investors
In May, the core retail sales decreased by 0.3% against expectations of growth of 0.2%. The retails sales also lost 0.3% against the forecast of +0.1%. The core consumer price index fell by 0.1% against the expectations of growth of 0.2%. After the release of these data, the expectation of the rate hikes dropped from 90% to 86%, the yield on 2-year bonds fell from 1.367% to 1.290%. The British pound added more than 70 points and only after the rate increase began to decline.
It is worth to pay attention to yesterday's labor data in the UK. The claimant count change showed 7.3 K, the average earnings increased by 2.1% in 3 months against the expectations of 2.4%. There is a possibility that the UK will withdraw from the EU without any trade agreement.
So, the rate is increased. At the same time, we should not forget that until August (at the request of D. Trump), the Congress must raise the limit on the national debt. As we have noted, this issue should pass smoothly in Congress.
Today, it is the Bank of England's turn to decide on monetary policy. Also, the last BoE meeting protocol will be published. As usual, markets don’t expect any changes on the background of Brexit. The economic forecasts for Great Britain are not encouraging – the retail sales are expected to decline by 0.8% in May.
The US will publish data on the Industrial Production, which is expected to grow by 0.2%, the Philadelphia Fed Manufacturing index can show 24.0 against the previous 38.8.
How we trade binary?
We would buy Call binary options with 20:00 GMT expiry if a one hour candle closes above the 1.2762 level. If our first target is not reached and the price goes below 1.2720, the first scenario would be invalidated. We would buy Put options if a one hour candle closes below the 1.2720 level.
Target price: 1.2762
Expiry time: 20:00 GMT