Eurozone – German Ifo Business Climate Index
At GMT 8:00 a.m., the Ifo Institute for Economic Research published this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index, which is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.
Since the survey has a large sample size compared to similar studies, binary options traders consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.
Last month, the German Ifo Business Climate index came out at 107.5, and this month, the forecast was set slightly higher, at 107.6. Nevertheless, the actual Ifo Business Climate index came out much better than the market’s expectation, at 108.
New Zealand – ANZ Business Confidence Index
Later in the week, on Friday, at GMT 1:00 a.m., the Australia and New Zealand (ANZ) bank will release its business outlook report that measures the business confidence in the New Zealand in terms of the level of a diffusion index by surveying around 1,500 businesses in the country.
Since the survey includes various manufacturers, builders, retailers, agricultural firms, and service providers; binary options investors consider this index to be a leading indicator of the economic health of the country.
Last month, the ANZ business confidence index came out at -2.3, a huge drop compared to May’s reading of 15.7 and April’s reading of 30.2.
Trade Recommendation for the EUR/NZD
Although the EUR/NZD remained in an uptrend for last several months, the pair finally broke the well-respected uptrend line on July 20. However, the EUR/NZD price failed to penetrate below the support around the 0.6350 level. As a result, on Monday, the price soon climbed back to test the resistance around the 1.6800 level.
Regardless, EUR/NZD could not penetrate above the 0.6800 level either, and formed a double top pattern instead. As the July 27 daily candlestick also formed a bearish pin bar, it signaled additional bearish movement this week.
As the ANZ Business Confidence Index for New Zealand has been sharply falling over the last two months, it has set a bullish fundamental outlook for the EUR/NZD.
However, earlier today, the EUR/NZD price penetrated below the low of the yesterday’s pin bar, which was at 1.6653. Hence, the short-term technical outlook is now pretty bearish for this pair.
Under the circumstances, it is recommended that traders consider placing a PUT order for the EUR/NZD with their US binary options brokers at the current market price, as it is likely to remain below the 1.6815 level for the time being.
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