AUD/NZD Tests Major Resistance Near 1.0850 Amid Forecast of Increasing Australian Inflation

AUD / NZD – Technical Analysis for Binary Options Brokers

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 brokers to be a leading indicator of the Australian economy.

Last quarter, the Australian consumer price index increased by 0.5%, and the forecast for this quarter is that it will increase by 0.6%.

New Zealand – Trade Balance

On Thursday, at GMT 11:45 p.m., the Statistics New Zealand will release the national trade balance figure, which measures the difference of the value between net import and net export of the country during the previous month.

Since the export of a country is directly correlated to the demand for its currency, a positive trade balance figure indicates that foreigners had to buy more local (NZD) currency in exchange of their domestic currency. Hence, binary options brokers consider the trade balance to be an important indicator of the health of the New Zealand’s economy.

Last month, the trade balance figure of New Zealand came out at -$18 million, and this month the forecast is currently set a much better figure, at $375 million.

AUD/NZD Forecast

AUD/NZD Analysis for binary options brokers

Since breaking below the uptrend line on March 24, 2017, the AUD/NZD price went down by around 200 pips over the last month. However, as soon as the AUD/NZD reached near the 50% Fibonacci level, it found strong support and resumed the uptrend. Earlier today, the AUD/NZD reached as high as the 1.0850 level, but so far has failed to penetrate above this strong resistance.

As the Australian Consumer Price index is expected to increase by 0.6% in the last quarter, we believe it would set a bullish fundamental outlook for the AUD/NZD this week. Furthermore, the New Zealand’s trade balance came out -$18 million last month, which indicates that the optimistic forecast of $375 million this month may not be reached.

Under the circumstances, if the AUD/NZD penetrates and closes above the 1.0850 level, it would likely attract additional bullish momentum in the market. Hence, Australian binary options traders should look out for trading opportunities above this major resistance level around 1.0850.

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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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