AUD/NZD to Test Resistance Near 1.0840 Amid Wait-and-See Approach of the Australian Central Bank

AUD/NZD  Forecast & Technical Analysis for binary options

Australia – CB Leading Index

On Wednesday, at GMT 2:30 p.m., the Conference Board Inc released the month-over-month leading index for Australia. It measures the changes in the level of a composite index based on seven other major fundamental indicators.

The CB leading index aggregates some of the other indicator data. So, HighLow investors consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.

Last month, the CB leading index came out at -0.4%. If the negative trend continues, it will likely have a bearish effect on the AUD/NZD.

New Zealand – GDT Price Index

On Wednesday., 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 -0.8% If the figure declines again this month, it will likely have a bearish effect on the New Zealand Dollar.

AUD/NZD Forecast

AUD/NZD Analysis - May 20 2020

 

The AUD/NZD broke below the long-term uptrend line on May 11. But it found a strong support near 1.0620. Consequently, the bulls took control and the uptrend resumed within few days. Last week, the AUD/NZD broke above the previous daily high near 1.0750. It then turned into a support. On Friday, the pair reached near the next major weekly resistance level, around 1.0840. If the uptrend continues, it will likely test the 1.0840 level this week.

The Australian CB Leading Index declined during last period and given the Covid-19 situation. It may decline again. On the other hand, the GDT Price Index in New Zealand will also set to decline due to falling demands. The bulk of the directional movement for AUD/NZD will likely depend on technical factors. But the wait-and-see approach of the Reserve Bank of Australia is currently fueling the bullish Australian Dollar. Hence, if the pair breaks above the resistance near 1.0840, it will 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 1.0840.

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Financial Analyst at Clicking Media Group
John was born in Wollongong (NSW ) and studied at The London School of Economics ( England, UK ). Currently he lives in Sydney ( NSW ) and he works as financial market analyst.
John Walker
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