AUD/JPY – Technical Analysis for Australian Binary Options
Japan – Producer Price Index (PPI)
Today, at GMT 11.50 p.m., the Bank of Japan released the month-over-month Producer Price Index (PPI), which measures the changes in the price of goods and raw materials bought by Japanese manufacturers during the previous month.
Binary options traders consider the Japanese Producer Price Index (PPI) to be a leading indicator of the consumer inflation because any substantial increase in the raw materials is passed on to the buyers of the finished products by manufacturers. Hence, an increase in PPI indicates rising prices at the consumer level, which contributes to overall national inflation.
Last month, the Japanese PPI (m/m) increased by 2.1% and the forecast for this month was set at an increase of 2.2%. However, the actual figure came out slightly lower, at 2.1% increase.
Australia – National Australia Bank (NAB) Limited Business Confidence Index
On Tuesday, at GMT 1:30 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 investors consider it as a leading indicator of the overall economic health in the coming months.
Last month, the NAB business confidence index reading came out at 13, a first double-digit figure after two months. If the trend continues, it would likely to have a bullish effect on the Australian Dollar.
AUD/JPY Forecast
Since early February 2017, the AUD/JPY remained bearish and the price has fallen by around 665 pips over the last few months. In April, the AUD/JPY found a strong support around 81.50 level, which kept the pair range bound between 81.50 and 84.50 for the last few months. However, during the last two months, the AUD/JPY also formed a downtrend line and last week, the pair was once again found resistance around this downtrend line.
As the Australian NAB business confidence index has remained very bullish over the last few months, but the Japanese PPI came out slightly lower than what the market was expecting, we believe it would likely set a bullish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY breaks above the downtrend line and closes above the immediate resistance near 83.40 level, it would likely attract additional bullish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities above this major resistance level around 83.40.
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