Weekly Top 5 Binary Options Analysis and Forecast 01/06-01/10/2014
The Must-Watch Top 5 Events of the Week
1. German Consumer Price Index
01/06/2014 – Monday at 1:00 pm GMT
What will it affect: EUR, DAX
Forecast: 1.4% from the previous 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 because it shows fluctuations in buying power of the Euro. In other words, a higher CPI means that consumers pay more for the same product than they did last month so the Euro is weaker. This may eventually determine the ECB to adjust the interest rate.
Directional bias: UP if the actual value is higher than 1.4%
DOWN if the actual value is lower than 1.4%
How I would trade this event: I would trade hourly Puts on EUR/USD if the value is not higher than 1.5%.
2. Federal Reserve Chairperson Nomination Vote
01/06/2014 – Monday at 10:30 pm GMT
What will it affect: USD, US stocks and indices
Forecast: no clear forecast is announced but the general opinion is that Yellen’s nomination will be approved
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The US Senate will vote to accept or reject the nomination of Janet Yellen as the next head of the Federal Reserve. The vote may have mixed influence on the market but volatility is anticipated at the time of the event, especially if unexpected delays occur.
Directional bias: UP if the nomination is approved
DOWN if the nomination is not approved
How I would trade this event: I don’t trade at the time of such events because irregular movement is a distinct possibility.
3. Bank of England Interest Rate
01/09/2014 – Thursday at 12:00 pm GMT
What will it affect: GBP, FTSE
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: Although the rate is not expected to change, its release remains a very important event which is likely to influence short to medium term direction. At the same time the Asset Purchase Facility comes out and shows the amount of money created by the central bank with the purpose of stabilizing the currency.
Directional bias: UP if the Rate is increased or the APF decreased
DOWN if the Rate is decreased or the APF is increased
How I would trade this event: I don’t trade because technical analysis has no accuracy at times like these.
4. ECB Press Conference
01/09/2014 – Thursday at 1:30 pm GMT
What will it affect: EUR, DAX
Forecast: no forecast is announced for this type of event; the Interest Rate is not expected to change from the current 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 will be announced 45 minutes before the Conference but the main market mover will be Mario Draghi’s Q&A session during the press conference. Traders try to interpret his answers and attitude, looking for hints about the future direction of the pair but often fail and this can create strong moves and sharp reversals which are difficult to trade.
Directional bias: UP the Rate is increased or Draghi has a hawkish attitude
DOWN if the Rate is decreased or Draghi has a dovish attitude
How I would trade this event: I don’t trade such events for the reasons mentioned above.
5. US Non Farm Payrolls
01/10/2014 – Friday at 1:30 pm GMT
What will it affect: USD, US stocks and indices
Forecast: 194K from the previous 203K
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, Daily FX
Why traders care and what to expect: The indicator measures the change in the number of employed people compared to the previous month and excluding the farming sector. It is considered the most important US indicator related to the employment situation and its impact is almost always a huge one.
Directional bias: UP the actual number is higher than 194K
DOWN if the actual number is lower than 194K
How I would trade this event: Once the initial volatility subsides I will trade according to the established direction.
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Note1: The FOMC Meeting Minutes come out Wednesday at 7:00 pm GMT and have the potential to be a market mover so take that into consideration if you will be trading at the time.
Note2: 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.