Weekly Top 5 Binary Options Analysis 09/30-10/04/2013
The Must Watch Top 5 Events of the Week
1. Reserve Bank of Australia Cash Rate
10/01/2013 – 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, RBA official website
Why traders care and what to expect: The Interest Rate decision is immediately followed by the RBA Rate Statement which offers insights into the reasons that determined the rate change or why it wasn’t modified. This is the primary tool used to communicate the Bank’s monetary policy and usually contains hints about future decisions.
Directional bias: UP if the Rate is increased or if the Statement contains a hawkish outlook
DOWN if the Rate is decreased or if the Statement contains a dovish outlook
How I would trade this event: I will probably wait until volatility has settled down and decide afterwards.
2. ECB Interest Rate Decision and Press Conference
10/02/2013 – Wednesday 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, Bloomberg, Reuters, DailyFX, Forex Factory, 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 which follows 45 minutes later. The President will read a speech and then he will answer audience questions. The second part is the most important one because investors and traders around the world try to interpret his answers and attitude, but they often fail to do 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 refrain from trading at the time of such events.
3. FED Chairman Ben Bernanke Speaks
10/02/2013 – Wednesday at 7:30 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, Daily FX, Forex Factory
Why traders care and what to expect: The Chairman is due to speak at the Federal Reserve Bank’s Conference titled “Community Banking in the 21st Century, in St. Louis. The speech will most likely generate some volatility, especially if Ben Bernanke will talk about the monetary stimulus.
Directional bias: UP if the Chairman’s attitude will be hawkish
DOWN if the Chairman’s attitude will be dovish
How I would trade this event: I don’t trade at the time of such speeches.
4. Bank of Japan Monetary Policy Statement
10/04/2013 – Friday early morning (exact time not known at the moment)
What will it affect: JPY, Japanese indices
Forecast: unchanged
Where to keep an eye on the event: CommuniTraders, Forex Factory, Daily FX, Bloomberg, Reuters
Why traders care and what to expect: Once every month the members of the BoJ Policy Board meet to analyze economic developments and to decide whether to adjust the Interest Rate or not. At each meeting they establish a Guideline for Money Market Operations. The recommendations contained in this document will shape the future monetary direction.
Directional bias: UP if the Statement contains a hawkish outlook
DOWN if the Statement contains a dovish outlook
How I would trade this event: I don’t trade at the time of such events.
5. US Non Farm Payrolls
10/04/2013 – Friday at 12:30 pm GMT
What will it affect: USD, US Indices and Stocks
Forecast: 179K from the previous 169K
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 US data related to the jobs market. 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 179K
DOWN if the actual number is lower than 179K
How I would trade this event: I would buy 15 minute Puts on USD/JPY if the value will be lower than 175K
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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.