EUR/GBP Appears Bearish after Forming a Pin Bar on Last Friday

United Kingdom – Claimant Count Change

On Wednesday, the UK’s Office for National Statistics will release the Claimant Count Change figure, which measures the changes in the number of people claiming unemployment-related benefits during the previous month.

Since it is the first fundamental indicator that confirms the employment situation in the UK, binary options investors consider this to be an important indicator of consumer spending in the coming months. This is because consumer spending is highly dependent on labor market situation in the country.

In October, the UK’s Claimant Count Change figure came out at 4,600 and the forecast for this month is currently set at 1,600.

Eurozone – German Preliminary GDP

On Friday, at GMT 7:00 a.m., the Destatis will release the quarter-over-quarter German Preliminary GDP figure, which measures the changes in the value of all products and services produced by the Germany economy. However, this figure is adjusted for inflation in order to provide a more accurate data.

Binary options traders consider the German GDP to be one of the most vital fundamental indicators of measure the production in the Eurozone economy, as German economy makes up a large part of the entire Eurozone economic activities.

Last quarter, the German preliminary GDP grew by 0.4% and the forecast for this quarter is currently set at a slightly lower rate of growth, at 0.3%.

Trade Recommendation for the EUR/GBP

EURGBPDailyAfter breaking two significant uptrend lines during October, the EUR/GBP price fell around 450 pips over the last few weeks.

Last week, the EUR/GBP formed a large bullish outside bar (BUOB) and the binary options market was expecting a retracement move. But, instead of an upward trend, the EUR/GBP price formed a bearish pin bar.

Earlier today, the EUR/GBP price has penetrated the low of this bearish pin bar, indicating there could be additional bearish momentum in the market.

As the UK’s Claimant Count Change figure is expected to come much lower than last month, the fundamentals are also indicating the bearish trend to continue this week. Moreover, the forecast for the German Prelim GDP (q/q) is set to decline compared to last month, which also support this bearish thesis.

Under the circumstances, it is recommended that traders consider placing a PUT order for the EUR/GBP with their binary options brokers at the current market price level, as long as the price is trading above 0.7108.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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