AUD/NZD Tests Key Resistance Near 1.0975 Amid Increase in Australian Business Confidence
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Australia – National Australia Bank (NAB) Limited Business Confidence Index
On Tuesday, at GMT 12:30 a.m., the National Australia Bank (NAB) Limited released its monthly business confidence index figure. This figure measures the level of a diffusion index based on a survey of 350 businesses in Australia.
The survey asks respondents to rate the current business environment in Australia. Businesses are the first to react to changing business conditions. So, binary options traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.
Last month, the NAB business confidence index reading came out at 5. This month, it improved slightly and came out at 6.
New Zealand – Food Price Index
On Wednesday, at 9:45 p.m., the Statistics New Zealand will release the food price index. It measures the changes in the price of food and food services bought by households in the country over the past month.
Binary options investors pay special attention to the food price index because food price tends to be highly volatile in New Zealand and any sudden change can have a noticeable impact on the overall inflation situation in the economy.
Last month, the food price index in New Zealand came out at -0.5%. However, the food price index has been increasing for last several months and if the trend continues, it would likely be a positive figure this month as well.
AUD/NZD Forecast
The AUD/NZD formed a bullish pin bar on June 19. Since then, it remained highly bullish and climbed up by around 510 pips. However, after reaching the 1.1175 level, the AUD/NZD found a strong resistance and fell towards uptrend line. It broke below the pivot zone around 1.0975 in the process. After testing the uptrend line several times, the AUD/NZD seem to be resuming the uptrend line. Currently, it is testing the resistance around 1.0975.
The Australian NAB business confidence index just went up from 5 to 6. On the other hand, the Food Price Index in New Zealand went down last month and it may do so once again. We believe it would set a bullish fundamental outlook for the AUD/NZD this week. Therefore, if the AUD/NZD closes above the resistance near 1.0975, 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 1.0975.
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
Asif Imtiaz
