Eurozone – German Preliminary Consumer Price Index (CPI)
On Wednesday, the Destatis will release the month-over-month German Preliminary CPI, which measures the change in the price of goods and services bought by German consumers over the past month.
Since the German central bank primarily uses the CPI to measure inflation, it has profound impact on the German economy. Moreover, as the German economy makes up a large portion of the overall Eurozone economic activity, the German CPI also influences the valuation of the Euro against other major currencies. Hence, binary options traders consider the German Preliminary CPI to be a leading indicator of the Euro.
Last month, the last German preliminary CPI (m/m) indicated that there was a 0.4% increase in price and the forecast for March is that there would have been an additional 0.6% increase in the price level during the past month.
Australia – Private Sector Credit
On Thursday, at GMT 12:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data, which measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.
Australian Binary options investors consider the private sector credit to be an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.
In February, the private sector credit in Australia increased by 0.5% and the forecast for March is currently set 0.5% as well.
Trade Recommendation for the EUR/AUD
Since forming a bearish pin bar on February 11, the EUR/AUD has remained in a strong downtrend, which pushed the price to as low as 1.4466. Soon after reaching this low on March 10, the EUR/AUD found substantial support and started a retracement, which formed a bullish outside bar (BUOB) and indicated a potential change in the trend.
However, for the last two weeks, the EUR/AUD price has mostly remained range bound. During this time, the 1.4925 level has acted as an important resistance level that kept the price of the EUR/AUD from going further up.
As the German Preliminary Consumer Price Index is expected to increase at a faster pace over the last month, we believe the fundamental outlook for the EUR/AUD would likely remain bullish this week.
Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the EUR/AUD with their binary options brokers once the price closes above the 1.4925 level.
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