Weekly Top 5 Binary Options Analysis and Forecast 02/03-07/2014
The Must-Watch Top 5 Events of the Week
1. Reserve Bank of Australia Interest Rate Decision
02/04/2014 – Tuesday at 03:30 am GMT
What will it affect: AUD, Australian Stocks and Indices
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: Interest rates affect the medium term movement of a currency and a rate change almost guarantees a huge impact on the market. Rate hikes make the AUD more appealing to investors and although no change is expected, the Statement that is released at the same time may contain hints about future rate changes and will most likely generate volatility.
Directional bias: UP if the Rate is increased or the Statement contains hints of future increases
DOWN if the Rate is decreased or the Statement contains hints of future decreases
How I would trade this event: I trade only after the initial volatility subsides, according to the established direction.
2. Australian Retail Sales
02/06/2014 – Thursday at 12:30 am GMT
What will it affect: AUD, Australian Stocks and Indices
Forecast: 0.5% from the previous 0.7%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The indicator shows the change in the total value of retail-level sales and it’s the most important gauge of consumer spending which in turns represents a major part of the entire economy. Better than expected numbers usually strengthen the AUD.
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 place an hourly Put on AUD/USD if the value will be 0.4% or lower.
3. Bank of England Interest Rate Decision
02/06/2014 – Thursday at 12:00 pm GMT
What will it affect: GBP, UK stocks and indices
Forecast: unchanged 0.50%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Forex Factory, DailyFX
Why traders care and what to expect: BoE is not expected to change the current value of the Interest Rate but the event is always important and is likely to create volatility nonetheless. At the same time the Asset Purchase Facility is announced and a change would have a strong effect on the pair.
Directional bias: UP if the Rate is increased or the APF is decreased
DOWN if the Rate is decreased or the APF is increased.
How I would trade this event: I don’t trade at the time of such events. Once volatility is back to normal I will trade accordingly.
4. ECB Interest Rate Decision and Press Conference
02/06/2014 – Thursday at 12:45 pm GMT (Conference at 1:30 pm GMT)
What will it affect: EUR, DAX
Forecast: unchanged 0.25%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The interest rate is not expected to change and almost always the Press Conference that follows 45 minutes later is the main event of the day. ECB President Mario Draghi will read a prepared speech and afterwards he will answer journalists’ questions. This second part of the Conference is usually the most volatile and technical analysis is almost useless at the time.
Directional bias: UP the Rate is increased or the President has a hawkish attitude
DOWN if the Rate is decreased or the President has a dovish attitude
How I would trade this event: I will not trade until the Press Conference is over and a clear direction is established.
5. US Non Farm Payrolls
02/07/2014 – Friday at 1:30 pm GMT
What will it affect: USD, US stocks and indices
Forecast: 185K from the previous 74K
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 report related to the employment situation in the United States and generates a massive impact almost always. If more people are employed, consumer spending is likely to increase and it’s a clear sign that economy is thriving.
Directional bias: UP the actual value is higher than 185K
DOWN if the actual value is lower than 185K
How I would trade this event: I would buy an hourly Put on EUR/USD and an hourly Call on USD/JPY if the value will be at least close to expectations.
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Note: The times, dates and values can change during the week. Also, different sources sometimes show different values. Keep an eye on the mentioned financial websites for any modifications.