Weekly Top 5 Binary Options Analysis and Forecast 11/11-15/2013
The Must-Watch Top 5 Events of the Week
1. United Kingdom Consumer Price Index
11/12/2013 – Tuesday at 09:30 am GMT
What will it affect: GBP, FTSE
Forecast: 2.5% from previous 2.7%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: Consumer prices are directly related to inflation; if consumers pay more for the same product than they did during the previous analyzed period, it means inflation is higher. A CPI value which is outside a certain range may eventually determine the Bank of England to adjust interest rates or to take other measures and that’s why traders keep a close eye on this indicator.
Directional bias: UP if the CPI is above 2.5%
DOWN if the CPI is below 2.5%
How I would trade this event: I would buy an hourly Put on GBP/USD and one on FTSE if the value will not be higher than 2.5%.
2. Bank of England Inflation Report and Gov Carney’s speech
11/13/2013 – Wednesday at 10:30 am GMT
What will it affect: GBP, FTSE
Forecast: no forecast is announced for this type of event
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The Inflation Report contains BoE’s assessment of the current inflation level and also a projection for the next 2 years regarding the economy, monetary policy and possibly hints about future interest rates. Governor Mark Carney will speak during a press conference related to the Report and volatility will be almost certainly present.
Directional bias: UP if the Report contains a positive outlook or if Carney has a hawkish attitude
DOWN if the Report contains a negative outlook or if Carney has a dovish attitude
How I would trade this event: I don’t trade during speeches of heads of Central Banks. After the speech I will trade in the direction of the latest momentum.
3. ECB Monthly Bulletin
11/14/2013 – Thursday at 09:00 am GMT
What will it affect: EUR, DAX
Forecast: no forecast is announced for this type of event
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX, ECB Official website
Why traders care and what to expect: The Monthly Bulletin shows the statistical data that was analyzed when the Governing Council decided to cut the Interest Rate from 0.50% to 0.25% and more important, it contains analysis of current and future economic conditions. All this shapes investor’s sentiment about the Euro and thus, determines the future direction of Euro related pairs.
Directional bias: UP if the Bulletin contains a hawkish outlook
DOWN if the Bulletin contains a dovish outlook
How I would trade this event: I would buy a four hour Put on EUR/USD if the Bulletin doesn’t contain a clearly hawkish outlook.
4. United Kingdom Retail Sales
11/14/2013 – Thursday at 09:30 am GMT
What will it affect: GBP, FTSE
Forecast: 0.2% from previous 0.6%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters
Why traders care and what to expect: Consumer spending represents the majority of overall economic activity and the retail sector accounts for the biggest part of consumer spending. That’s why this indicator is closely monitored by all traders and has a high impact on the market. Higher numbers are beneficial for UK’s economy, suggesting increased activity.
Directional bias: UP if the actual value will be above 0.2%
DOWN if the actual value will be below 0.2%
How I would trade this event: I would buy 15 minute Puts on GBP/USD if the actual value will be below 0.3%.
5. Fed Chairperson Designate Janet Yellen Testifies
11/14/2013 – Thursday at 3:00 pm GMT
What will it affect: USD, US stocks and indices
Forecast: no forecast is announced for this type of event
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Forex Factory, DailyFX.
Why traders care and what to expect: The Senate Banking Committee will hold a nomination hearing for Janet Yellen who was nominated by Barack Obama to succeed Ben Bernanke as Fed Chairman. She will read a prepared statement and will answer questions of the Committee. The second part tends to create the most volatility and I recommend caution if trading at the time.
Directional bias: UP if Janet Yellen has a hawkish attitude
DOWN if Janet Yellen has a dovish attitude
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.
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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.
Note 2: The German GDP is announced Thursday at 07:00 am GMT and the release is likely to have a strong impact on Euro related pairs.