EUR/AUD Might Turn Bullish if Australian Building Approvals Declines

Eurozone – M3 Money Supply

On Tuesday at GMT 8:00 a.m., the European Central Bank will release the year-over-year M3 money supply figure. It measures the changes in the total quantity of issues currency in the greater Europe. The M3 consists of all hard currency in circulation as well as the bank deposits, including in the central bank.

As the M3 money supply increases, it makes funds available for investments. However, an excess money supply can also lead to inflation and liquidity trap in the economy. Hence, the European Central Bank often adjust their interest rate policy based on the current M3 money supply situation. As a result, binary options traders consider the quantity of the M3 to act like a leading indicator of the future direction of the economy.

Last month, the Eurozone M3 money supply increased by 3.7%. This month, the forecast is set at a 3.9% increase.

Australia – Building Approvals

On Wednesday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the national month-over-month building approvals figure. It measures the changes in the number of approvals of new buildings.

A build permit indicates new construction work. It also suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, binary options investors 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 increased by 2.6%. This month, analysts are expecting it to decrease by -2.9%.

EUR/AUD Forecast

Since breaking below the uptrend line on May 4, the EUR/AUD fell by around 480 pips. During the last few weeks. The pair broke below two important support levels, 1.5600 and 1.5490. However, over the last two days, the EUR/AUD started a bullish retracement. Currently, it is trading just below the pivot zone around 1.5490.

The Eurozone M3 Money Supply is set to increase from 3.7% to 3.9% over the last month. On the other hand, analysts are expecting the Australian building approval figure to decline by -2.9%. We believe it would set a bullish fundamental outlook for the EUR/AUD this week. Therefore, if the EUR/AUD closes above the resistance near 1.5490, 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 1.5490.

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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