Germany – ZEW Economic Sentiment
Tomorrow, at GMT 9:00 a.m., the Zentrum fur Europaische Wirtschaftsforschung (ZEW) will release its German economic sentiment index, which measures the level of a diffusion index based on surveying 275 German institutional investors and market analysts.
Since the professional investment community, investors and analysts have the latest data; their reflection about the economy tends to be the most accurate. Therefore, binary options investors consider the ZEW’s German economic sentiment index to be a leading indicator of the entire Eurozone economy. This is because the German economy is one the most important driving forces behind the Euro currency.
Last July, the ZEW German economic sentiment came out at 29.7, and this month the forecast is set at a modest increase to 31.1.
United States – Prelim Unit Labor Costs
Later, at GMT 12:30 p.m., the US Bureau of Labor Statistics will release the quarter-over-quarter preliminary unit labor costs, which measures the change in the price that businesses in the United States pay for labor. However, this data excludes the farming industry, where labors are hired mostly on a temporary basis. Although it is quarterly data, it is represented in an annualized format.
Since businesses usually pass the extra cost of labor to consumers, binary options traders consider the preliminary unit labor costs to be an important leading indicator of the consumer inflation.
In May, the US preliminary unit labor costs increased by 6.7% and the forecast for this quarter is expected to come at a decrease of -0.1%.
Trade Recommendation for the EUR/USD
On July 27, the EUR/USD price broke and closed above the intermediate downtrend line. But, the price soon started a retracement move, and went down towards the 1.0850 level.
Last week, on Friday, the EUR/USD price formed a bullish outside bar (BUOB), which closed above the resistance around the 1.0950 level.
As the German ZEW economic sentiment index is expected to rise to 31.1 this week, binary options traders are being optimistic about the Euro. As a result, today, the EUR/USD penetrated above Friday’s high, signal additional bullishness in the next few days. The EUR/USD price so far climbed around 110 pips since the market opened.
Under the circumstances, it is recommended that traders consider placing a CALL order for the EUR/USD with their US binary options brokers at the current market price, as it may take a few days for the price to reach near the next resistance level around 1.1130.
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