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USD/JPY binary signal - U.S. Producer Price Index - 11 Jan 2018

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Signal details
Entry Price: 
Close Price: 
Expiry Time: 
21:00 GMT
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The U.S. producer price index data will be released today 13:30 GMT. According to the economists polled, inflation at factory gate is forecast to rise only 0.2% for the month of December. This is half the increase seen in November, when producer prices rose 0.4% on the month. Core PPI, which exludes food and energy prices is forecast to rise 0.2% as well, slightly lower than 0.3% increase seen in the previous month.

On a year over year basis, headline PPI is forecast to rise 3.0%, down from 3.1% increase seen previously. Core PPI is however expected to rise slightly to 2.5%, up from 2.4% seen in the previous month.

The PPI data is important as it can potentially foretell whether producers will eventually pass on the higher costs to the consumers. Thus, the PPI data could potentially signal whether consumer prices will rise in the coming months. However, the trend in the PPI has been mostly subdued with producer price inflation staying somewhat subdued. This could mean that the consumer prices might have also remained sluggish as a result.

The PPI data comes ahead of the consumer price index data that will be released later this week on Friday. Fed officials at the previous FOMC meeting were optimistic that inflation will start to rise eventually due to a tighter labor market as well as the tax cut reforms implemented by President Trump. This has forecast some economists to believe that the Fed could hike rates more than three times. However, a lot will depend on how inflation will behave.

Based on the above, today's binary options signal is USDJPY. The Japanese yen posted strong gains over the past two days taking the markets by surprise. However, we see that the USDJPY is already posting a correction.

Therefore, we are looking to purchase daily CALL options at 111.61 for 21:00 GMT expiry time. We expect USDJPY to establish support at 111.61 before closing higher on the day.

binary options signal usdjpy 11 Jan 2018

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.