Australia – Cash Rate
At GMT 4:30 a.m., the Reserve Bank of Australia (RBA) released the official cash rate, which is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.
Since short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies, binary options traders pay close attention to any changes in the official cash rate.
The RBA last time cut its cash rate was on April 7, when it was reduced to 2% from 2.25%. The forecast for July was also set at 2% and the RBA has kept its rate unchanged for the time being.
Eurozone – Eurogroup Meetings
As the Greek referendum result came in favor of No to the European imposed austerity measures, today’s Eurogroup meetings held in Brussels will be primarily focused on the next steps.
Meanwhile, the eccentric Greek Finance Minister, Yanis Varoufakis, has suddenly resigned earlier this morning. Binary options investors are taking this as a sign that the Greek Government is willing to change their tone in coming days. This is because Mr. Varoufakis had been very open regarding his disregard for the terms of the bailout deal and the market is considering this move by the Greek Prime Minister Tsipras as a positive sign for future discussions.
The Eurogroup has already given Greece the final ultimatum and if there is no progress on this issue during today’s meetings, Greece may have to quit the European common currency altogether.
While the Eurogroup meetings will go on for the whole day, participants often talk to the media during the meetings. Any remarks regarding major change in the position of party, the European creditors and the Greek Government, can create high market impact and price volatility may go up in the binary options market.
Trade Recommendation for the EUR/AUD
The declining employment situation in Australia has already pushed the EUR/AUD price higher last week. Especially, on last Friday, the EUR/AUD climbed around 280 pips and closed above the important psychological pivot zone around the 1.4740 level. In addition, the RBA has kept its interest rate at 2%, so binary options investors do not expect any major change in the valuation of the Australian Dollar this week.
For the last few days, the EUR/AUD price remained within the Friday’s range, which makes the Friday candlestick an Inside Bar (IB).
If there is any positive outcome from today’s Eurogroup meetings, the EUR/AUD would likely move further up.
Under the current technical market condition, it is recommended that traders consider placing a CALL order with their binary options brokers for the EUR/AUD, once the price closes above the 1.4800 level on the daily time frame.[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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