Weekly Top 5 Binary Options Analysis 09/02-09/2013 – Must Watch Events
The Must Watch Top 5 Events of the Week
1. Reserve Bank of Australia Interest Rate Decision
09/03/2013 – Tuesday at 04:30 am GMT
What will it affect: AUD
Forecast: unchanged, 2.50%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: At the same time the RBA will release the Rate Statement and usually this is the main market mover. If the Rate is changed, the decision will gain additional importance. The Statement is the primary tool the Reserve Bank of Australia uses to communicate about monetary policy direction and future rate changes.
Directional bias: UP if the Rate increases or the Statement is hawkish
DOWN if the Rate is decreased or the Statement is dovish
How I would trade this event: I would trade only when a clear direction emerges.
2. Euro Zone Gross Domestic Product (QoQ)
09/04/2013 – Wednesday at 09:00 am GMT
What will it affect: EUR, DAX
Forecast: unchanged, 0.3%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: The indicator measures the total output of goods and services the Euro Zone produces and although its value is somewhat easy to predict, it still remains a high impact indicator and the main gauge of an economy’s strength. The value is predictable because almost all components of the GDP are released earlier.
Directional bias: UP if the GDP is higher than 0.3%
DOWN if the GDP is lower than 0.3%
How I would trade this event: I would trade Calls with an hourly expiration on EUR/USD if the value is higher than 0.4%.
3. Bank of England Rate Decision and Asset Purchase Facility value
09/05/2013 – Thursday at 11:00 am GMT
What will it affect: GBP, FTSE
Forecast: unchanged 0.50% and 375B respectively
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Forex Factory, Daily FX
Why traders care and what to expect: The Rate is not expected to change but the event will create volatility nonetheless. The Asset Purchase Facility represents the amount of money the Bank of England creates in order to stabilize the currency by purchasing assets in the open market. A larger sum is usually perceived bearish by market participants but no changes are expected either.
Directional bias: UP if the Rate is increased or the APF decreased
DOWN if the Rate is decreased or the APF increased
How I would trade this event: I would trade only when a direction is established.
4. ECB Interest Rate Decision and Press Conference
09/05/2013 – Thursday at 11:45 am GMT (Press Conference at 12:30 pm GMT)
What will it affect: EUR, DAX
Forecast: unchanged 0.50%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Daily FX, Bloomberg, Reuters, ECB Official website
Why traders care and what to expect: Although the Rate decision creates decent volatility, traders usually wait for Mario Draghi’s (ECB President) speech at the Press Conference and try to analyze his attitude. Investors and traders around the world try to interpret his words and attitude, but they often fail at doing it correctly and this generates sharp reversals and whipsaws. Caution is recommended if trading at the time.
Directional bias: UP if the Rate is increased or if Mario Draghi has a hawkish attitude
DOWN if the Rate is decreased or if Mario Draghi has a dovish attitude
How I would trade this event: I don’t trade at the time of such events
5. US Non Farm Payrolls
09/06/2013 – Friday at 12:30 pm GMT
What will it affect: USD, US Stocks and Indices
Forecast: 180K from the previous 162K
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: This is the most important job related indicator that the US releases and almost always the market reacts strongly. A higher number is indicative of a thriving economy where people find jobs more easily and the opposite is valid for a lower number. Employment is also highly correlated with consumer spending which is a major part of the US economy: employed people spend more than unemployed ones.
Directional bias: UP if the actual number is higher than 180K
DOWN if the actual number is lower than 180K
How I would trade this event: I would buy 15 minute Puts in sequence on EUR/USD if the value will be at least 180K
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Note : The times, dates and values can change during the week. Keep an eye on the mentioned financial websites for any modifications.