GBPUSD – Technical Analysis for Binary Options Brokers
United Kingdom – Manufacturing PMI
Later, at GMT 9:30 a.m., the Markit will release the United Kingdom’s manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 600 purchasing managers in the country.
Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new order situations as well as inventory conditions; binary options traders consider this data to be a leading indicator of the overall economic health of the country.
Last month, the UK’s manufacturing PMI came out at 55.4 and the forecast for this month is currently set at 54.6.
United States – Unemployment Claims
On Thursday, at GMT 12:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.
Binary options investors consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.
Over the last several weeks, the US unemployment claims figure came out between 246,000 and 260,000. Last week, it came out at 258,000. If the claims remain within the mentioned range, it would likely have a neutral effect on the market.
Trade Recommendation for the GBPUSD
After sharply falling around 770 pips on October 6, 2016, the GBP/USD found strong support around the 1.1990 level. This is the second time the GBPUSD had a significant free fall in since June, after British voters decided to vote in favor of Brexit.
Although the GBP/USD price has retraced back up around 470 pips, it soon resumed the downtrend, but failed to close below the support level around 1.2130 over the last two weeks.
As the UK’s manufacturing PMI figure is expected to go down to 54.6, we believe it would likely add additional bearish pressure on the GBPUSD this week.
Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the GBPUSD with their binary options brokers as soon as the price closes below the 1.2130 level on the daily time frame.
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