Weekly Top 5 Binary Options Analysis 09/16-20/2013
The Must Watch Top 5 Events of the Week
1. Euro Zone Consumer Price Index
09/16/2013 – Monday at 09:00 am GMT
What will it affect: EUR, DAX
Forecast: unchanged 1.3%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: The Consumer Price Index is the main gauge of inflation; a higher CPI indicates that inflation is rising and consumers pay more for the same product. A high inflation can determine the ECB to raise interest rates in an attempt to counter the effects. The Bank’s goal is to keep the CPI within 0.0% and 2.0% and values outside this range may trigger a Rate change.
Directional bias: UP if the number is higher than 1.3%
DOWN if the number is lower than 1.3%
How I would trade this event: I would buy a Put on EUR/USD if the actual number is lower than 1.3%
2. German ZEW Economic Sentiment
09/17/2013 – Tuesday at 09:00 am GMT
What will it affect: EUR, DAX
Forecast: 45.3 from the previous 42.0
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The importance of the ZEW survey comes from the fact that it is based on the opinions of about 275 professional investors and analysts who are asked to rate the medium term economic and business conditions. Due to the nature of their work, they are well informed and aware of the factors that influence the market so their opinion about the economy usually influences the market.
Directional bias: UP if the actual number is higher than 45.3
DOWN if the actual number is lower than 45.3
How I would trade this event: I would buy 15 minute Calls on DAX if the value is higher than 47.
3. US Consumer Price Index (YoY)
09/17/2013 – Tuesday at 12:30 pm GMT
What will it affect: USD, US Stocks and Indices
Forecast: 1.6% from the previous 2.0%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Daily FX
Why traders care and what to expect: The indicator is the American counterpart of the indicator I mentioned earlier (Euro Zone CPI) and tracks changes in the price consumers pay for the products they purchase. The US CPI uses for calculation over 200 categories of goods and services, each with different weight.
Directional bias: UP if the CPI is higher than 1.6%
DOWN if the CPI is lower than 1.6%
How I would trade this event: I would buy hourly Puts on S&P 500 and DJIA if the value is lower or equal to 1.6%.
4. US Federal Funds Rate
09/18/2013 – Wednesday at 6:00 pm GMT
What will it affect: USD, US Stocks and Indices
Forecast: unchanged, 0.25%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Daily FX, Bloomberg, Reuters
Why traders care and what to expect: I mentioned just the Interest Rate decision but there’s a cluster of important events at that time: the FOMC Economic Projections, the FOMC Statement and the FOMC Press Conference (6:30 pm GMT). FED Chairman Ben Bernanke speaks and answers questions at the Press Conference and all these events will probably generate huge volatility so I recommend caution if trading at the time.
Directional bias: UP if the Chairman has a hawkish attitude or if the Rate increases
DOWN if the Chairman has a dovish attitude or if the Rate decreases
How I would trade this event: I don’t trade at the time of such events
5. UK Retail Sales
09/19/2013 – Thursday at 08:30 am GMT
What will it affect: GBP, FTSE
Forecast: 0.5% from the previous 1.1%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: Sales made at a retail level are crucial for the UK economy and this indicator is the primary gauge of consumer spending. Higher numbers suggest a good overall economic environment and increased confidence among consumers. Keep in mind that consumer spending accounts for the majority of overall economic activity in the United Kingdom.
Directional bias: UP if the actual value is higher than 0.5%
DOWN if the actual value is lower than 0.5%
How I would trade this event: I would buy 15 minute Puts in sequence on GBP/USD if the value will be at least 0.5% or lower.
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Note*: The week is filled with other important events such as the UK CPI, Bank of England’s Meeting Minutes, Reserve Bank of Australia’s Monetary Policy Meeting Minutes, US Existing Home Sales, Philly Fed Manufacturing Index or the speech of Governor Kuroda. All are important so you must be aware of their outcome.
Note**: The times, dates and values can change during the week. Keep an eye on the mentioned financial websites for any modifications.