AUD/JPY Bears Likely to Lose Momentum if Australian Building Approval Rebounds

AUD/JPY  Forecast & Technical Analysis for Australian binary options

Australia – Building Approvals

On Tuesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the national building approvals figure. It measures the changes in the number of approvals of new buildings.

A build permit indicates new construction work. It also suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, GoMarkets traders 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 decreased by -0.2%. This month, analysts are expecting it to increase by 1.1%.

Japan – Household Spending

On Thursday, at GMT 11:30 p.m., the Japanese Statistics Bureau will release the Household Spending figure. It measures the inflation adjusted value of all expenses by the Japanese consumers.

Binary options investors consider the household consumer spending to be a leading indicator of a country’s economic health. This is because the amounts spent by consumers have a ripple effect on the overall economic activity in the country.

Last month, the year over year Japanese Household Spending figure increased by -4.8%. The forecast for this month is currently set at an additional decrease of -3.9%.

AUD/JPY Forecast

AUD/JPY Forecast - March 3 2020

The AUD/JPY fell by around 500 pips over the last week amid concerns about Coronavirus. It also broke below the long-term support level around Coronavirus. Earlier today, the AUD/JPY climbed up by around 160 pips to test the 71.10 level, which now turned into a resistance.

The Australian building approval figure will likely grow by 1.1% over the last month. On the other hand, analysts are expecting the Japanese Household Spending to further decline by -3.9%. We believe it would set a bullish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY closes above the resistance near 71.10, 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 71.10.

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John Walker

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