AUD/NZD – Technical Analysis for Binary Options Trading
Australia – Cash Rate
Tomorrow 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.
Last month, the RBA set the cash rate at 1.5% and the forecast for this month is that the RBA will leave the cash rate unchanged for the time being.
New Zealand – GDT Price Index
Later in the day, 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 investors use this data to predict future trade balance, which helps in the valuation of the New Zealand Dollar against other major currencies.
Last period, the GDT price index increased by 4.5% after increasing by 11.4% in the previous reporting period. If the trend continues, we would likely see the index go up once more this week.
Trade Recommendation for the AUD/NZD
Since reaching 1.0765 on October 14, 2016, the AUD/NZD has reversed its uptrend and over the last two months, the pair fell towards the 1.0400 level, where the support has been holding the price so far.
Last week, the AUD/NZD formed a bullish outside bar (BUOB) after once again being rejected around the 1.0400 level. Today, the AUD/NZD broke above the high of this BUOB, but shortly retraced towards the 1.0450 area.
As the GDT price index has been increasing over the last two months, it may slow down a bit over the last reporting period. In that case, it would likely have a bullish effect on the AUD/NZD price.
Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the AUD/NZD with their binary options trading brokers as soon as the price closes above the 1.0505 level on the daily time frame, which is the high of the outside bar.
Binary Options Trading Brokers to trade AUD/NZD
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