AUD/NZD Trades Near Key Resistance Level Amid Forecast of a Rate Cut in New Zealand

Australia – National Australia Bank (NAB) Limited Business Confidence Index

Tomorrow, at GMT 2:30 a.m., the National Australia Bank (NAB) Limited will release its monthly business confidence index figure. This figure measures the level of a diffusion index based on a survey of 350 businesses in Australia.

The survey asks respondents to rate the current business environment in Australia. Since businesses are the first to react to changing business conditions, the level of their sentiment regarding optimism and business confidence, binary options traders consider it as a leading indicator of the overall economic health in the coming months.

Last month, the NAB business confidence index came out at 6. If the figure stays the same this month or fluctuate lower than 6, it would likely put some additional bearish pressure on the AUD/NZD price.

New Zealand – Official Cash Rate

On Wednesday, at GMT 10:00 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 investors 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 2.25% and the forecast for this month is that the rate would be reduced to 2.00% in order to boost the slowing New Zealand economy.

Trade Recommendation for the AUDNZD

Trade Recommendation for the AUDNZD

Since the formation of a bearish pin bar on April 25, 2016, the AUD/NZD price has declined by around 900 pips and formed two downtrend lines in the process.

Last month, the AUDNZD broke above the intermediate downtrend line, but the bullish move was capped around the second downtrend line, where resistance proved to be too strong.

As a result, the AUD/NZD resumed the downtrend, but after bouncing from the support level near 1.0410, it formed a bullish pin bar August 2, which pushed started the second wave of bullish move.

Earlier today, the AUDNZD opened above the second downtrend line and so far climbed around 40 pips and now trading near the 1.07200 level.

As the RBNZ is expected to cut its key cash rate from 2.25% to 2.00% this month, the fundamental outlook for the AUD/NZD would likely to remain bullish.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the AUD/NZD with their binary options brokers as soon as the price and closes above the 1.0720 level on the daily chart.

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