AUD/NZD Bears Gain Strength After Australian Building Approvals Plummet

AUD/NZD  Forecast & Technical Analysis for Australian binary options

Australia – Building Approvals

On Monday, at GMT 12:30 a.m., the Australian Bureau of Statistics released 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, Australian 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 7.2%. This month, analysts were expecting it to decrease by -1.0%. However, the actual figure came out at -8.1%

New Zealand – GDT Price Index

On Wednesday at GMT 12:00 a.m., the Global Dairy Trade will release the GDT price index. It measures the changes in the average price of dairy products sold at auction in New Zealand.

The bulk of New Zealand’s exports to the world market consists of dairy products. The rising price of dairy products ensures that foreign buyers have to purchase it at a higher price. The GDT price index acts as a leading indicator of the country’s trade balance. Hence, binary options traders use this data to predict future trade balance. As it helps in the valuation of the New Zealand Dollar against other major currencies.

Last period, the GDT price index increased by 1.7% If the figure grows again this month, it will likely have a bullish effect on the New Zealand Dollar.

AUD/NZD Forecast

AUD/NZD forecast - December 3 2019

On November 13, the AUD/NZD broke below the key support near the 1.0675 level. Since then, it has remained in a strong downtrend. Consequently, it fell by around 170 pips over the last few weeks. Last week, the AUD/NZD broke below another major support level around 1.0540. If the downtrend continues, it will likely fall towards the 1.0450 level.

The Australian building approval came out much worse than expected, at -8.1%. On the other hand, the GDT Price Index grew last month, and it will likely remain positive this month. We believe it would set a bearish fundamental outlook for the AUD/NZD this week. Therefore, if the AUD/NZD remains below the pivot zone near 1.0540, it would likely attract additional bearish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities at current market price as long as it trades below the 1.0540 level.

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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