AUD/NZD Trading Near Key Pivot Zone After Disappointing Australian Building Approvals

Australia – Building Approvals

Today, at GMT 2:30 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 building 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 up by 3.3% and the forecast for this month was set at a decrease of -3.6%. However, the actual figure came out much worse than what the market was expecting, at -5.2%

New Zealand – GDT Price Index

Tomorrow, the Global Dairy Trade will release the GDT price index, which measures the changes in the average price of dairy products sold at auction in New Zealand.

Since the bulk of New Zealand’s exports to the world market consists of dairy products, the GDT price index acts as a leading indicator of the country’s trade balance because the rising price of dairy products ensures that foreign buyers have to purchase it at a higher price. Therefore, the binary options investors use this data to predict future trade balance, which helps in the valuation of the New Zealand Dollar against other major currencies.

Last month, the GDT price index remained unchanged at 0.0% after increasing 3.4% in the previous reporting period. The overall trend for the GDT price index for the last few months remained bullish and if the trend continues, it would likely increase this week as well.

Trade Recommendation for the AUD/NZD

AUDNZDDaily

Since the end of April, the AUD/NZD price has remained in a strong downtrend, which pushed the price towards the 1.0400 level.

Since the start of June, the AUD/NZD mostly remained in a range between 1.0410 and 1.0525 levels. But, last week, the AUD/NZD finally broke below the 1.0410 level. However, earlier today, the AUD/NZD price once again retraced back above the 1.0410 level and currently testing the minor downtrend line formed since the start of June.

As the Australian building permits figure came out much worse than what the market was expecting, it would likely create additional bearish pressure in the market. However, if the AUD/NZD price closes above the important pivot zone around 1.0410 level, it can certainly push the price much higher this week.

Under the circumstances, it would be recommended that Australian binary options traders consider placing a CALL order for the AUD/NZD with their binary options brokers as soon as the price and closes above the 1.0410 level.

Conservative traders may wait for the price to break above the downtrend line prior to taking any positions.

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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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