Eurozone – German Ifo Business Climate Index
Today, at GMT 9:00 a.m., the Ifo Institute for Economic Research will publish this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index, which is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.
Since the survey has a large sample size compared to similar studies, Australian binary options investors consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.
Last month, the German Ifo Business Climate index came out at 108.7, and this month, the forecast is set slightly lower, at 107.7.
Australia – Consumer Price Index
On Wednesday, at GMT 2:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter consumer price index (CPI) figure that measures the changes in the price of goods and services bought by Australian consumers in the last quarter.
Since the consumer price index is primarily used by the Australian central bank to measure inflation, any significant change in the CPI often makes the Forex market extremely volatile. Also, as the inflation at the retail level has a big influence on the central bank’s future monetary policy. Hence, it is considered by binary options traders to be a leading indicator of the Australian economy.
Last quarter, the Australian consumer price index decreased by 0.2%, and the forecast for this quarter is set at an increase of 0.4%.
Trade Recommendation for the EUR/AUD
Since the formation of a bearish pin bar on May 24, 2016, the EUR/AUD has remained in a downtrend, which pushed the price around 1,150 pips over the last two months. During this time, the EUR/AUD formed two downtrend lines.
Last week, the EUR/AUD started a retracement after finding a sizable support around the 1.4500 level. Interestingly, the minor retracement move has broken above the immediate downtrend line and currently approaching the second downtrend line.
As the German Ifo Business Climate Index is expected to decline this week and the Australian CPI is expected to rise, both of these data releases suggest a bearish outlook for the EUR/AUD. Hence, if the EUR/AUD price manages to break below the current range, it would likely attract additional bearish momentum in the market.
Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the EUR/AUD with their binary options brokers as soon as the price and closes below the 1.4650 level on the daily chart.[featured feattitle=’Best Rated Broker: HighLow’ site=’HighLow’ ]HighLow.net is our top binary options platform for Australian Traders. [/featured]