UK - Industrial Orders Forecast CBI
At 11:00 am GMT, the Confederation of British Industry (CBI) will release its Industrial Demand Expectations Index reading, which mainly measures the level of the Diffusion Index by surveying 550 manufacturers in the country.
Since these companies are the first to be affected by changing market conditions, any significant change in the expectations of their industrial demands can serve as an important indicator of future economic activities in the country. For example, corporate spending, job creation, and capital investments. Hence, binary options traders look to the CBI Industrial Expectations Index to be a leading indicator of the British economy in general. Last month, last February, the forecast for the CBI industrial orders came in at 10 and expectations for this month were set slightly down to 9.
United States - Existing Home Sales
Later in the afternoon, at 2:00 PM GMT, the US National Association of Realtors will release the Existing Home Sales figure, which measures the annual number of apartment buildings sold in the past month. Also, this figure does not include any new construction.
Selling existing homes can create a positive impact in the local economy as a home mortgage is often taken out. Moreover, renovating the house and purchasing other goods and services from the local area contributes to the GDP. Therefore, binary options traders look at the existing home sales figure as another important leading indicator of the overall economy in the US. In February, 4.82 million existing homes were sold in the US and expectations for this month were set at a higher figure of 4.91.
GBP/USD trading recommendations
Although the GBP/USD has been in a downtrend since July 2014, it broke the sloping downtrend line on February 5, 2015. However, the upward movement has been limited by the resistance level around 1.5600 and over the past month, The currency pair has resumed the downtrend.
With the continued strength of the US economy, this may push the US Federal Reserve to raise interest rates for one night in the second quarter of 2015. These optimistic expectations also may play a vital role in adding more downside momentum to the GBP/US dollar.
Later, on March 11th, the GBP/USD price broke below the support level around 1,4550, and last week, it reached the 161.8% Fibonacci extension level of the previous ascending swing level at 1,4621. Currently, the GBP/USD is hovering around the 1,4950 level.
If the UK CBI Industrial Orders Expectations Index comes below 10 and the US Existing Home Sales figure is above 4910000, closer to $5M, it will definitely add downside momentum to the downtrend in GBP/USD.
Once the price drops below 1,4620, this level acts as price resistance. In this case, it is recommended that binary options traders consider the necessity of placing a PUT on the GBP/USD currency pair.
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