Australia – Home Loans

On Wednesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the month-over-month home loans figure, which measures the changes in the number of new loans approved for owner-occupied homes.

Since most home purchases are financed by banks, the new home loan figure acts as an excellent gauge of how many qualified buyers are ready to take out home loans. Therefore, economists and binary options traders consider the changes in the new home loan figure to be a leading indicator of the overall economic situation in the country.

Last month, the Australian new home loans increased by 2.6% and the forecast for this month is set at a decrease of 2.7%.

New Zealand – Official Cash Rate

Later, at GMT 8:00 p.m., the Reserve Bank of New Zealand will release the Official Cash Rate, which is the interest rate that banks in New Zealand use to lend funds held at the central bank.

Binary options traders consider the official cash rate to be the most important factor of the valuation of the New Zealand Dollar against other currencies. In fact, most of the other fundamental indicators are considered just to predict future interest rate.

Last month, the RBNZ left the official cash rate at 2.5% and the forecast for this month is that the rate would be left unchanged for the time being.

Trade Recommendation for the AUD/NZD

The AUD/NZD price action has remained mostly range bound since the start of January. Last week, the AUD/NZD price reached near the 100% retracement level of the last downward swing, and once again found strong resistance. As a result, the AUD/NZD has formed two inside bars in the last week alone.

So far, the AUD/NZD bulls have failed to penetrate and close above the 1.0970 level, which is indicating that the pair would likely continue to trade within the established range.

As the Australian home loans figure is expected to decline this month, the fundamental outlook for the AUD/NZD is also suggesting further bearishness.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the AUD/NZD with their binary options brokers once the price closes below the 1.0888 level, which is the low of the minor inside bar.

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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