Australia – Building Approvals
Earlier today, at GMT 1:30 a.m., the Australian Bureau of Statistics released the month-over-month national building approvals figure, which measures the changes in the number of new building approvals issued during the previous month.
Since a building approval is required prior to start construction work of a new building, it can signal future construction activity in Australia. Hence, binary options investors consider the Australian building figure to be an important leading fundamental indicator of the value of the Australian Dollar against other major currencies.
In May, the Australian building approval figure increased by 2.9%. However, the forecast for June was set at a negative 1.7% increase. The actual figure came way below the forecast, at a -4.4% decrease.
United Kingdom – Manufacturing Purchasing Managers’ Index (PMI)
Later in the morning, at GMT 8:30 a.m., the Markit will release the manufacturing purchasing managers’ index (PMI), which measures the level of a diffusion index by surveying 600 purchasing managers in the country.
Binary options traders consider the UK’s manufacturing PMI to be a leading indicator of the country’s economy as purchasing managers tends to have the most updated view regarding their country’s economy. Hence, a wide survey of purchasing managers can also signal future economic activity in the United Kingdom.
Last month, the UK’s manufacturing PMI reading came out at 51.9 and the forecast for June is currently set at a slightly improved reading of 52.7.
Trade Recommendation for the GBP/AUD
Since November 2014, the GBP/AUD price formed a long-term triangle pattern. Although price broke below this triangle on May 5, the next day a bullish pin bar formed and the GBP/AUD price moved higher, closing above the triangle by May 7.
The GBP/AUD price remained range bound around the 61.8% Fibonacci retracement level of the last downward swing that created the triangle pattern for several days. However, on May 19, the GBP/AUD price formed a Doji that contributed to the additional bullish momentum and price went up to test the 100% Fibonacci level.
During this bullish move, the GBP/AUD has formed a sharp uptrend line and the pair is currently trading near this trend line.
Interestingly, last two days low volatility has formed a Bullish Outside Bar (BUOB).
The Australian building approvals rate fell by 4.4% over the last month and the formation of a BUOB around the important 100% Fibonacci retracement level indicate that there might be additional bullish move in coming days.
Under the circumstances, it is recommended that traders consider placing a CALL order with their favorite binary options brokers for GBP/AUD, once the price breaks above the 2.0060 level. As there is a good probability that once the BUOB bar is broken, the GBP/AUD price will remain above the bar’s low, at 1.9786, for the next few days.[featured feattitle=’Recommended Broker: HighLow.net’ site=’HighLow’ ] HighLow.net is a popular australian binary options broker regulated by ASIC. [/featured]
About our Forex and Binary Options Analyst: Asif Imtiaz
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