Weekly Top 5 Binary Options Analysis and Forecast 12/02-08/2013

The Must-Watch Top 5 Events of the Week

 

1. Speech of Fed Chairman Ben Bernanke

12/02/2013 – Monday at 1:30 pm GMT 

 

What will it affect: USD, US indices and stocks

Forecast: no forecast is announced for this type of event

Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX

 

Why traders care and what to expect: The Chairman of the Federal Reserve speaks at the National College Fed Challenge in Washington DC. The competition encourages students to learn more about the Federal Reserve System and about monetary policy; although the speech is not directly related to the current US financial situation, strong moves may be triggered if the Chairman hints about future actions of the Fed.

 

Directional bias:  UP if Ben Bernanke’s attitude is hawkish

                                 DOWN if Ben Bernanke’s attitude is dovish

 

How I would trade this event: I don’t trade during such events.

 

 

 

2. Reserve Bank of Australia Interest Rate

12/03/2013 – Tuesday at 3:30 am GMT

 

What will it affect: AUD, Australian stocks and indices

Forecast: unchanged 2.50%

Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory

 

Why traders care and what to expect: Interest rates are crucial for currency valuation and immediate direction. Although the rate is not expected to change, volatility will be probably present. A Rate Statement will be released at the same time by the RBA, outlining the reasons that determined the rate decision; it also contains hints about future monetary direction.

 

Directional bias: UP if the Rate is increased or the Statement contains a positive outlook

                                 DOWN if the Rate is decreased or the Statement contains a negative outlook

 

How I would trade this event: I don’t trade during such events. Once volatility subsides, I would trade according to the established direction if there is one.

 

 

 

3. Bank of England Interest Rate decision

12/05/2013 – 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, DailyFX, Forex Factory

 

Why traders care and what to expect: The interest rate has the potential to be a currency’s strongest market-mover event, especially if it’s modified by the Central Bank. Although no change is anticipated for Thursday’s release, volatility will be high. Keep an eye on the Asset Purchase Facility value which is announced at the same time.

 

Directional bias: UP if the Rate is increased        

                                  DOWN if the Rate is decreased

                                

How I would trade this event: I don’t trade such events. Sharp turns are often experienced.

 

                                         

 

4. ECB Interest Rate Decision and Press Conference

12/05/2013 – Thursday at 12:45 pm GMT (Press 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, ECB official website

 

Why traders care and what to expect: Usually the Rate decision creates decent volatility but traders wait for the Press Conference which follows 45 minutes later. During the Conference, Mario Draghi will read a speech and then he will answer audience questions. This part is the most important because investors and traders around the world try to interpret his answers and attitude, but they often fail and this generates sharp reversals and whipsaws.

 

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: Market direction is hard to predict during such events so I refrain from trading.

 

 

 

5. US Non Farm Payrolls 

12/06/2013 – Friday at 1:30 pm GMT

 

What will it affect: USD, US stocks and indices

Forecast: 184K from previous 204K

Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX

 

Why traders care and what to expect: This is the most important report regarding the US employment situation. An increase in the number of employed people suggests a thriving economy and also acts as a leading indicator of consumer spending.

 

Directional bias:  UP the actual number will be higher than 184K

                                  DOWN if the actual number will be lower than 184K

 

How I would trade this event: I will probably wait until volatility has settled down and decide afterwards.

 

 

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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.                

 

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