Weekly Top 5 Binary Options Analysis and Forecast 11/04-11/2013
The Must-Watch Top 5 Events of the Week
1. Reserve Bank of Australia Interest Rate Statement
11/05/2013 – Tuesday at 03:30 am GMT
What will it affect: AUD, Australian stocks and indices
Forecast: no forecast is announced for the Statement; Rate – unchanged 2.50%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: Both events take place at the same time but the Rate Statement is more important than the Rate decision because it contains commentary about the reasons that influenced the votes and shows the Bank’s stance on economic development.
Directional bias: UP if the Rate is increased or the Statement is more hawkish than expected
DOWN if the Rate is decreased or the Statement is more dovish than expected
How I would trade this event: I don’t trade at the time of such releases because movement is often erratic.
2. Bank of England Interest Rate Decision
11/07/2013 – 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: No change is expected for the interest rate but the event will create volatility anyway. The Asset Purchase Facility represents the amount of money the Bank of England creates in order to stabilize the currency by purchasing assets in the open market. A larger sum is perceived as bearish by market participants but no changes are expected from the current 375B.
Directional bias: UP if the Rate is increased or the APF decreased
DOWN if the Rate is decreased or the APF increased
How I would trade this event: I only trade after a direction is clearly established and volatility settled down.
3. ECB Interest Rate Decision and Press Conference
11/07/2013 – Thursday at 12:45 pm GMT (Press Conference at 1:30 pm GMT)
What will it affect: EUR, DAX
Forecast: unchanged 0.50%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Daily FX, Forex Factory
Why traders care and what to expect: The Rate is not expected to change so the actual release will probably not be the main market mover. Instead, the Press Conference that follows will generate strong moves and the main focus will be Mario Draghi’s attitude and answers to the journalists’ questions. Traders try to find clues about future rate decisions but they often misinterpret the President’s words and this creates sharp reversals.
Directional bias: UP if 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 would wait for a clear direction to be established before trading.
4. US Gross Domestic Product
11/07/2013 – Thursday at 1:30 pm GMT
What will it affect: USD, US Stocks and Indices
Forecast: 2.0 from the previous 2.50%
Where to keep an eye on the event: CommuniTraders, Forex Factory, Daily FX, Bloomberg, Reuters
Why traders care and what to expect: The indicator shows the inflation adjusted value of all goods and services produced by the US economy. Most of the GDP components are known in advance and this makes a forecast of its value highly accurate but the actual release remains a high impact event.
Directional bias: UP if the actual value is higher than 2.0%
DOWN if the actual value is lower than 2.0%
How I would trade this event: I would buy 15 minute Puts on EUR/USD if the actual value will meet expectations.
5. US Non Farm Payrolls
11/08/2013 – Friday at 1:30 pm GMT
What will it affect: USD, US stocks and indices
Forecast: 126K from the previous 148K
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Forex Factory, DailyFX.
Why traders care and what to expect: This is the most important US jobs related indicator and almost always the market reacts strongly to its release. A higher number is indicative of a thriving economy with people finding 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.
Directional bias: UP if the actual number is higher than 126K
DOWN if the actual number is lower than 126K
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.