Weekly Top 5 Binary Options Analysis and Forecast 01/20-24/2014
The Must-Watch Top 5 Events of the Week
1. German ZEW Economic Sentiment
01/21/2014 – Tuesday at 10:00 am GMT
What will it affect: EUR, DAX
Forecast: 63.4 from previous 62.0
Where to keep an eye on the event: CommuniTraders, Forex Factory, Bloomberg, Reuters, DailyFX
Why traders care and what to expect: The importance of this indicator comes from the fact that it is based on the opinions of about 275 German analysts and institutional investors. The nature of their jobs keeps them highly informed, and makes their opinion a reliable one. Higher values suggest optimism.
Directional bias: UP if the actual value is higher than 63.4
DOWN if the actual value is lower than 63.4
How I would trade this event: I would buy a four hour Put on EUR/USD and one on DAX if the value will not be higher than 65.0.
2. Australian Consumer Price Index
01/22/2014 – Wednesday at 12:30 am GMT
What will it affect: AUD, Australian stocks and indices
Forecast: 0.5% from the previous 1.2%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: Consumer prices are the main gauge of inflation: if people pay more for the same product, it means inflation has increased. A consumer price which is too high may determine the central bank to raise interest rates to counter inflation and to maintain it between certain boundaries. Usually a higher than expected CPI strengthens the Australian Dollar.
Directional bias: UP if the actual value is higher than 0.5%
DOWN if the actual value is lower than 0.5%
How I would trade this event: I would buy an hourly Put on AUD/USD if the value will not be above 1%.
3. Bank of Japan Monetary Policy Statement
01/22/2014 – Wednesday (exact time is not announced)
What will it affect: JPY, Japanese stocks and indices
Forecast: no forecast is announced
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, Forex Factory, DailyFX
Why traders care and what to expect: This is the main tool the Bank of Japan uses to communicate with investors and contains important insights into the Bank’s outlook regarding current and future economic conditions. Sometimes hints are revealed about future monetary direction and this may generate increased volatility.
Directional bias: UP if the Statement contains a positive outlook
DOWN if the Statement contains a negative outlook
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.
4. Bank of Canada Interest Rate Decision
01/22/2014 – Wednesday at 3:00 pm GMT
What will it affect: CAD, Canadian stocks and indices
Forecast: unchanged 1.0%
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The Interest Rate is always a potential market mover, although no change is anticipated. A Press Conference follows an hour and fifteen minutes later and will be attended by Bank of Canada Governor who will answer journalists’ questions. The conference will probably create a lot of volatility and strong moves.
Directional bias: UP the Rate is increased or the Governor has a hawkish attitude
DOWN if the Rate is decreased or the Governor has a dovish attitude
How I would trade this event: I prefer to wait until the volatility calms down and a clear direction is established.
5. US Unemployment Claims
01/23/2014 – Thursday at 1:30 pm GMT
What will it affect: USD, US stocks and indices
Forecast: 331K from the previous 326K
Where to keep an eye on the event: CommuniTraders, Bloomberg, Reuters, DailyFX, Forex Factory
Why traders care and what to expect: The indicator is a gauge of economic health and it shows the change in the number of people looking for unemployment related benefits. Jobs are available easier in times of economic expansion and usually better than expected (lower) numbers are considered beneficial.
Directional bias: UP the actual number is lower than 331K
DOWN if the actual number is higher than 331K
How I would trade this event: I would trade a 15 minute Put on EUR/USD if the actual number will be lower than 325K
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Note: 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.