GBP/AUD Approaches Major Support Area after UK’s Manufacturing PMI Reading Jumped to 55.5

Australia – Building Approvals

Yesterday, at GMT 12:30 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 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 went down by 9.5% and this month the forecast was set at a modest 1.8% increase. However, the actual figure came out slightly better than what the market was expecting, at 2.2% increase.

United Kingdom – Manufacturing PMI

Later, at GMT 9:30 a.m., the Markit released the United Kingdom’s manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 600 purchasing managers in the country.

Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new order situations as well as inventory conditions; binary options investors consider this data to be a leading indicator of the overall economic health of the country.

Last month, in November, the UK’s manufacturing PMI came out at 51.8 and the forecast for November  was set at 51.3. However, the actual figure came out much better, 55.5.

Trade Recommendation for the GBP/AUD

GBPAUDDaily

Although the GBP/AUD remained mostly bearish for the last several weeks, it started a retracement move in the start of October and moved up around 700 pips. However, yesterday, the GBP/AUD formed a Double bar high, lower close (DBHLC) pattern that indicated additional bearishness in the market.

Earlier today, the GBP/AUD price penetrated yesterday’s low and the price fell to the 2.1400 level.

Since August 2015, the 2.1400 level acted as a major psychological pivot zone for the GBP/AUD. If the GBP/AUD price closes below this level by the end of the day, it may attract additional bearish pressure.

Regardless, binary options traders should keep in mind that the UK’s manufacturing PMI just came out much better than expected, and there could be is ample support around this area.

However, under the circumstances, it is recommended that traders consider placing a PUT order for the GBP/AUD with their binary options brokers, if the price penetrates and closes below the 2.1400 level.

Recommended Broker: HighLow.net

About our Forex and Binary Options Analyst:  Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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