Eurozone – Minimum Bid Rate
On Wednesday, at GMT 11:45 a.m., the European Central Bank (ECB) will release the minimum bid rate, which is the interest rate of the refinancing program that is providing the majority of the liquidity in the European banking system.
Binary options investors pay close attention to the minimum bid rate, as short term interest rates have a major impact on the valuation of any currency. Furthermore, many binary options analysts consider all other fundamental economic indicators and data just to forecast the future minimum bid rate set by the ECB.
On April 15, the ECB set the minimum bid rate to 0.05% and the forecast is that they would leave it unchanged at 0.05% for the time being.
United States – ADP Non-Farm Employment Change
Later on Wednesday, at GMT 12:15 p.m., the US based Automatic Data Processing, Inc. (ADP) will release its non-farm employment change figure, which measures the estimated changes in the number of employed people during the last month. However, the ADP excludes the farming industry and the government sector in their estimation.
ADP is a major payroll service provider to US based companies. Because of their large operation, they have access to payroll information and employment change figure from the US corporate sector. Binary options traders consider to the ADP non-farm employment change figure to be an important leading indicator of the US economy because job creation is one of the main factors behind consumer confidence and consumer spending. Therefore, correctly forecasting the labor market situation can help predict the overall economic activity in the country.
In May, the ADP non-farm employment change figure came out at 169,000 and the forecast for June is currently set at 200,000.
Trade Recommendation for the EUR/USD
The EUR/USD has been trending downwards since the second quarter of 2014. However, the bearish momentum accelerated at the end of the year, when the EUR/USD price fell from around 1.2500 to as low as 1.0460 between December 16, 2014 and March 13, 2015.
However, as soon as the price reached near the 1.0460 area, the EUR/USD price bounced and formed two upward sloping trend lines since then.
After closing below the psychological support around 1.1150 on May 19, the EUR/USD formed a bearish outside bar on May 22, which also closed below the intermediate uptrend line. The subsequent bearish move pushed the EUR/USD price towards the 161.8% Fibonacci extension level of the last upward swing, at 1.0924.
Currently, the EUR/USD price is trading near the 161.8% extension level for last one week.
Given that the ECB is likely to keep its minimum bid rate unchanged and the ADP employment change figure is expected to increase to 200,000; the fundamental outlook for the EUR/USD would be bearish for the coming few days.
Under the circumstances, it is recommended that traders consider placing a PUT order with their binary options brokers for the EUR/USD, as the price is likely to remain below the 1.1150 level this week.
Recommended Broker: Cherry Trade
Cherry Trade is the best rated US binary options broker
- Minimum Deposit only USD $200
- Up to 200% Deposit Bonus
- Starting Trading with only $5
- Up to 85% Payout
- Fast 48 Hour Withdrawals