AUD/USD – Technical Analysis for Binary Options
Australia – Building Approvals
Today, at GMT 2:30 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 8.9% and the forecast for this month was set at a decrease of -3.9%. However, the actual figure came out much worse than what the market was expecting, at -13.4%.
United States – Producer Price Index
On Thursday, at GMT 1:30 p.m., the US Department of Labor will release the Producer Price Index (PPI) figure, which measures the changes in the price of products and services bought by manufacturers and service providers in the country.
Since the higher cost of production is usually passed on to the consumers, a rise in the producer price index indicates future inflation. Hence, this data is vital for binary options trading as it is used by binary options traders as a leading indicator of the overall US economy.
Last month, the US month-over-month PPI decreased by -0.1%, indicating deflationary pressure on the economy. Currently, the forecast for this month is set at 0.2% increase.
Since breaking below the uptrend line on April 4, 2017, the AUD/USD climbed down by around 225 pips and found support near the 61.8% Fibonacci level of the last upward swing, which is near the 0.7385 level. Although the pair formed a bullish pin bar at the end of last week, so far, the bearishness seems to be prevailing.
As the Australian building approval figure decreased by -13.4%, but the US PPI is expected to increase by 0.2%, we believe it would likely set a bearish fundamental outlook for the AUD/USD this week. Under the circumstances, if the AUD/USD price penetrates below the support around 0.7385, it would likely attract additional bearish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities below this major support level around 0.7385.
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