AUD/NZD Tried to Penetrate Key Support amid Increasing Dairy Price in New Zealand

Australia – Trade Balance

Today, at GMT 12:30 a.m., the Australian Bureau of Statistics released the monthly Trade Balance figure, which came out at -3.1 billion against an estimation of -2.48 billion.

Since the Trade Balance measures the difference in value between all import and export, including physical goods and intangible services, a positive figure suggests that there were more exports compared to imports. More exports increase the demand for the Australian currency as foreigners would need to convert their currency into Australian dollar for before paying for their imports. Hence,

This month’s trade balance was negative and worse than what the binary options traders were expecting. Hence, it was considered as pessimistic news for the Australian Dollar.

New Zealand – GDT Price Index

Later in the morning, at GMT 2:49 p.m., the Global Dairy Trade released the GDT price index, which measures the changes in the average price of dairy products sold at auction in New Zealand.

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

On September 15, the GDT price index increased by 16.5% after increasing 10.9% on September 1. Today’s figures suggested that it went up an additional 9.9% over the last two weeks, which would be a positive development for the New Zealand Dollar against other major currencies.

Trade Recommendation for the AUD/NZD

AUDNZDDaily

Since July 2, 2015, the AUD/NZD has remained range bound within 1.0895 and 1.1429. However, yesterday, the AUD/NZD price, for the first time in several months, penetrated below the support zone around the 1.0895 level.

However, a lack of bearish pressure soon pushed the price above the support zone. Earlier today, the AUD/NZD price penetrated above the high of yesterday’s daily bar.

Although the AUD/NZD price failed to close below the support zone in the first try, as far as market fundamentals go, the AUD/NZD outlook is quite bearish due to lower than expected Australian trade balance and the rising GDT price index.

Under the circumstances, it would be recommended that traders consider placing a PUT order for the AUD/NZD with their top binary options brokers, once the price closes below the 1.0895 level.

Recommended Broker: Tradorax

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