AUD/NZD Likely to Remain Bullish Amid Forecast of a Rate Cut by the RBNZ

Australia – Cash Rate

Tomorrow at GMT 5:30 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 last time cut its cash rate was on May 201, when it was reduced to 1.75% from 2.00%. The forecast or this month is that the RBA will leave the cash rate unchanged for the time being.

New Zealand – Official Cash Rate

On Wednesday, at GMT 10:00 p.m., the Reserve Bank of New Zealand will release the Official Cash Rate, which is the interest rate that banks in New Zealand use to lend funds held at the central bank.

Binary options traders consider the official cash rate to be the most important factor of the valuation of the New Zealand Dollar against other currencies. In fact, most of the other fundamental indicators are considered just to predict future interest rate.

Last month, the RBNZ left the official cash rate at 2.25% and the forecast for this month is that the rate would be reduced to 2.00% in order to boost the slowing New Zealand economy.

Trade Recommendation for the AUD/NZD

AUDNZDDaily

After falling around 800 pips since March 23, the AUD/NZD finally found ample support around the 1.0575 level last week. Last Friday, the AUD/NZD price penetrated below this level, but bulls pushed price above the pivot zone, almost forming a pin bar looking daily bar.

Earlier today, the AUD/NZD price penetrated above Friday’s high, indicating that the pair might be starting a bullish retracement move.

Since the RBNZ is expected to cut interest rate this month and the RBA is likely to keep their cash rate unchanged, we believe the fundamental outlook for the AUD/NZD would support the bullish momentum in the market as well. As the AUD/NZD price is already trading above last Friday’s high, it seems to be a good time to enter the market.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the AUD/NZD with their binary options brokers at current market price, as long as the pair is trading above the 1.0620 level.

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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