EUR/NZD Formed Inside Bar, May Move Towards 1.6770

Eurozone – German Ifo Business Climate Index

Yesterday, at GMT 9:00 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 investors 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 108.5, and this month, the forecast was set slightly lower, at 108.1. Nevertheless, the actual Ifo Business Climate index came out better than the market’s expectation, at 108.2.

New Zealand – Trade Balance

Later, at GMT 9:45 p.m., the Statistics New Zealand released the national trade balance figure, which measures the difference of the value between net import and net export of the country during the previous month.

Since the export of a country is directly correlated to the demand for its currency, a positive trade balance figure indicates that foreigners had to buy more local (NZD) currency in exchange of their domestic  currency. Hence, economists and binary options traders consider the trade balance to be an important indicator of the health of the New Zealand’s economy.

Last month, the trade balance figure of New Zealand came out at -$1079 million, and this month the forecast was set a much better figure, at -$822 million. However, the actual trade balance figure came out much worse than what the market was expecting, at -$1222 million.

Trade Recommendation for the EUR/NZD

EURNZDDaily

The EUR/NZD remained in a strong bullish trend for the first two quarters of 2015. However, after reaching the 1.8550 level and forming a huge inside bar in August, it has slowly started to show signs of bearishness.

Last week, the EUR/NZD closed below 38.2% Fibonacci retracement, which is situated around the 1.6770 level. The 1.6770 level has acted as a major pivot zone during the last uptrend.

As the Trade Balance of New Zealand has declined to historic levels in the last two months, the fundamental outlook for the EUR/NZD would likely to remain bullish this week and the price may move towards the 1.6770 level once again.

Under the circumstances, it would be recommended that traders consider placing a CALL order for the EUR/NZD with their binary options brokers, once the price closes above last Friday’s Doji looking inside bar (IB), which is at 1.6390.

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