Japan – Final Manufacturing PMI

At GMT 1:35 a.m., the Markit released Japan’s final manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 400 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 orders situation 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 Japan’s final manufacturing PMI reading came out at 51.4 and the forecast for August was also set at a reading of 51.6. However, the actual final PMI reading came out slightly lower compared to what the market was exacting, at 51.2.

United Kingdom – Manufacturing PMI

Later in the day, at GMT 8:30 a.m., the Markit will also 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 orders situation as well as inventory conditions; binary options investors consider this data to be a leading indicator of the overall economic health of the country.

Last month, in July, the UK’s manufacturing PMI came out at 51.4 and the forecast for August is set at a slightly improved reading of 51.6.

Trade Recommendation for the GBP/JPY

The GBP/JPY price opened with a gap below the uptrend line on June 28, which created a short-term downturn. As a result, the GBP/JPY price had fallen to as low as 185.00 by July 8.

However, after reaching the resistance zone near 185.00, the GBP/JPY bounced and started a retracement move, which now has formed another uptrend line in the process. During this last upward swing, the GBP/JPY price reached as high as 194.37 on July 17.

Last week, the GBP/JPY penetrated above the 194.37 level, but lack of additional bullish momentum in the market failed to close the price above this level. Instead, it formed a bearish pin bar.

Although the low of this pin bar was penetrated, the GBP/JPY has so far remained above the last uptrend line. Currently, it is gradually approaching the resistance near the 194.50 pivot zone.

As the Japanese final manufacturing PMI reading came lower compared to what the binary options traders were expecting, it would certainly create some bullish momentum in the GBP/JPY price.

Under the circumstances, it is recommended that traders consider placing a CALL order for the GBP/JPY with their binary options brokers once the price closes above the 194.60 level.

About our Forex and Binary Options Analyst:  Asif Imtiaz

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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