AUDCAD Forecast for HighLow
Australia – National Australia Bank (NAB) Limited Business Confidence Index
On Tuesday, at GMT 1:30 a.m., the National Australia Bank (NAB) Limited released 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. Businesses are the first to react to changing business conditions. So, binary options traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.
Last month, the NAB business confidence index reading came out at 6 after coming at 10 in May. This month, if the downtrend trend continues, it will have a bearish impact on the Australian Dollar against other major currencies.
Canada – Overnight Rate
The Bank of Canada will release the overnight rate on Wednesday afternoon, at GMT 2:00 p.m. The overnight rate is the interest rate that banks and other financial institutes in Canada use to lend and borrow funds among themselves.
Binary options investors consider the overnight interest rate to be the paramount factor in the valuation of the Canadian Dollar against other major currencies. In fact, it is often stated that binary options traders analyze all other fundamental data just to predict the future interest rate decision. Hence, any major change in the overnight interest rate may create large price swings on Wednesday.
Last month, the Bank of Canada kept its overnight rate at 1.25% and the forecast for this month is that the BOC will increase it to 1.50%.
AUD/CAD Forecast
Since breaking above the uptrend line on May 8, 2018, the AUD/CAD has climbed up by around 250 pips. However, after reaching the 0.9930 level, it found a strong resistance. Over the last few weeks, the AUD/CAD resumed the downtrend and broke below the pivot zone near the 0.9785 level. Currently, it is once again testing the resistance around the 0.9785 level.
The Australian NAB business confidence index fell for the last two months. On the other hand, there is a good chance that the Bank of Canada will increase its overnight interest rate from 1.25% to 1.50%. We believe it would set a bearish fundamental outlook for the AUD/CAD this week. Therefore, if the AUD/CAD fails to close above the resistance near 0.9785, it would likely attract additional bearish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities below this major resistance level around 0.9785.
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