AUDNZD – Binary Options Technical Analysis
Australia – Building Approvals
Today, at GMT 1:30 a.m., the Australian Bureau of Statistics released the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.
Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, binary options investors consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.
Last month, the building approvals figure went up by 12% and the forecast for this month was set at a decrease of -5.8%. However, the actual figure came out much better than the expectation, at a decrease of -1.8%.
New Zealand – GDT Price Index
Later in the day, at 3:06 p.m., the Global Dairy Trade will release the GDT price index, which measures the changes in the average price of dairy products sold at auction in New Zealand.
Since the bulk of New Zealand’s exports to the world market consists of dairy products, the GDT price index acts as a leading indicator of the country’s trade balance because the rising price of dairy products ensures that foreign buyers have to purchase it at a higher price. Therefore, the binary options traders use this data to predict future trade balance, which helps in the valuation of the New Zealand Dollar against other major currencies.
Last month, the GDT price index remained came out at a 1.7% increase. But, this month, the index declined by around 3%, putting a bearish pressure on the New Zealand Dollar.
Trade Recommendation for the AUDNZD
Since forming a bearish pin bar on April 24, the AUD/NZD has been on a steady downtrend. However, since September 14, 2016, the AUD/NZD has retraced around 350 pips and found resistance near the 1.0545 level. During this retracement, the pair also broke above the downtrend line, indicating a change in trend.
Last week, the AUDNZD price mostly remained in a tight range. But, as the Australian building approval figure came out much better than expected, it is likely that the fundamental outlook for the AUDNZD would remain bullish this week. Furthermore, the sharp decline of the New Zealand GDT price index also supports a bullish thesis.
Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the AUDNZD with their binary options brokers as soon as the price closes above the 1.0545 level on the daily time frame.
But, conservative traders may consider waiting for the AUDNZD price to break above last week’s high, which is at 1.0590.
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