EUR/AUD Price Action Suggests Bullishness Likely to Continue
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EUR/AUD – Technical Analysis for Australian Brokers
Australia – Consumer Price Index
On Wednesday, at GMT 1:30 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 increased by 0.7%, and the forecast for this quarter is that it will remain unchanged at 0.7% as well.
Eurozone – German Ifo Business Climate Index
Later, at GMT 10:00 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, 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 111.0, and this month, the forecast was set slightly higher, at 111.03.
Trade Recommendation for the EUR/AUD
Although the EUR/AUD remained mostly range bound since October 2016 and after breaking below the intermediate uptrend line on January 3, 2016, the pair continued the range bound price action and soon reached the support near 1.1435.
However, soon after reaching near 1.1435, the EUR/AUD price once again seems to be turning bullish as the pair has already broken above the last downtrend line and heading towards the resistance near 1.4200.
As the Australian CPI is expected to remain unchanged at 0.7% and the German Ifo business climate index is going to only increase slightly, we believe that from a fundamental perspective, the current bullishness of the EUR/AUD will continue this week. Hence, if the EUR/AUD price closes above the 1.4200 level, it would likely attract additional bullish momentum in the market.
Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the EUR/AUD with their Australian brokers as soon as the price closes above the 1.4200 level on the daily timeframe.
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