AUD/USD – Technical Analysis for Australian Binary Options
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.
The RBA left the cash rate at 1.5% in their last meeting and the forecast for this month is that the RBA will leave the cash rate unchanged at 1.5% for the time being.
United States – Institute for Supply Management (ISM) Manufacturing PMI
Later, at GMT 2:00 p.m., the Institute for Supply Management will release its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.
Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, binary options investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.
Last month, the ISM manufacturing PMI for the United States came out at 57.8 and the forecast for this month is set at 56.4.
AUD/USD Forecast
After climbing around 500 pips in July, the AUD/USD found a strong resistance near the 0.8080 level last week, and formed a bearish pin bar. Although the low of the pin bar was penetrated, the AUD/USD failed to close below the support level near 0.7955.
As the Australian cash rate is expected to remain at 1.5%, but the US ISM manufacturing PMI is expected to come at 56.4, we believe it would set a bearish fundamental outlook for the AUD/USD this week. Therefore, if the pair closes below the 0.7955 level, it would likely find additional bearish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities below this major support level around 0.7955.
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