Australia – New Motor Vehicle Sales
At GMT 12:30 a.m., the Australian Bureau of Statistics released the new motor vehicle sales figure, which measures the changes in the number of new motor vehicles sold in the domestic market over the past month.
New motor vehicle sales act as a leading indicator of consumer confidence because buying an expensive durable item like a car or a truck demonstrates that consumers are optimistic about their future financial situation. Hence, binary options traders use this fundamental data to gauge the overall economic condition of Australia.
Last month, in February, the month-over-month new motor vehicle sales figure in Australia decreased by 1.9% and this month, it rebounded and increased by as much as 2.9%.
United States – Capacity Utilization Rate
Later in the afternoon, at GMT 1:15 p.m., the US Federal Reserve will release the national capacity utilization rate, which measures the percentage of available resources that are being used by manufacturers, miners, and utility service providers in the country.
When producers utilize their available resources near full capacity, they tend to increase the price and that higher cost is ultimately passed on to the consumers. Therefore, binary options traders consider the capacity utilization rate to be a leading indicator of consumer inflation in the United States.
In February, the US capacity utilization rate came out at 79.4% and the forecast for March is set at 79.5%. If the capacity utilization rate comes above 80%, it would indicate a higher rate of consumer inflation in the United States over the next few months and would add further strength to the US Dollar.
Trade Recommendation for the AUD/USD
The prevailing AUD/USD down trend continued over the past few weeks after the pair broke below the strong support area near the 0.8000 level on January 23, 2015. The AUD/USD price tested the 0.8000 level once again on January 28; however, it could not penetrate above this level, which turned into a strong resistance.
As a result, the AUD/USD formed a bearish outside bar (BEOB) and the price soon declined towards the 261.8% Fibonacci extension level of the previous upward swing towards the trend line, where it found temporary support, at 0.7615.
As the Australian new motor vehicle sales rebounded over the past month, it may provide support to the AUD/USD at current price level. However, the pair would find additional bearish momentum if the US capacity utilization rate comes above 80%. In that situation, it is recommended that binary options traders consider placing a PUT order once the AUD/USD price goes below the 0.7550 level.
[featured feattitle=’Recommended Broker: HighLow.net’ site=’HighLow’ ] HighLow.net is a popular binary options broker regulated by ASIC. [/featured]About our Forex Analyst: Asif Imtiaz
- GBP/AUD Appears Bullish Amid Impressive Growth of Net Lending to Individuals in the UK - January 4, 2022
- AUD/CHF Likely to Break Above Key Resistance if Swiss Trade Balance Declines - December 20, 2021
- AUD/JPY Downtrend Line Likely to Hold the Bulls As Declining Japanese Household Spending Slowed Down - December 7, 2021
