Yesterday, the main event was the decision of the Bank of England to maintain a base rate
At the previous meetings only one member voted to increase the rate, now two more have joined him. With the release of news the British pound jumped by 90 points, but by the end of the day, the growth was 6 points.
Today, during the Asian session the Cable adds another 17 points
The reason for the voting for a rate increase is the rise in inflation. But, we think, the main reason is still in the systematic increase in the rate of the Fed. "Brexit" and political uncertainty prevents the Bank of England from raising the rate. Weak May retail sales also didn’t give the pound to rise.
In the US, the industrial production showed a zero increase vs. the expectation of 0.2%. The capacity utilization rate decreased from 76.7% to 76.6%.
Today, the Bank of England will publish a quarterly report on the economy. In the US, the number of housing starts is projected at 1.225 million in May, compared with 1.17 million in April. The number of building permits is expected to increase from 1.23 million to 1.25 million. The Michigan Consumer Sentiment is expected to increase from 97.1 to 97.2.
In the current situation of complete political uncertainty, the British pound reacts easily to every positive or negative news. We adhere to the general trend of the dollar and expect the pair to fall to 1.2720.
How we trade binary?
We would buy Put binary options with 20:00 GMT expiry if a one hour candle closes below the 1.2748 level. If our first target is not reached and the price goes above 1.2787, the first scenario would be invalidated. We would buy Call options if a one hour candle closes above the 1.2787 level.
Target price: 1.2748
Expiry time: 20:00 GMT