NZD/USD Bullishness Likely Continue amid Improving Global Dairy Trade

New Zealand – GDT Price Index

Tomorrow, the Global Dairy Trade will release 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 consists 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.

Last month, the GDT price index remained unchanged at 0.0% after increasing 3.4% in the previous reporting period. The overall trend for the GDT price index for the last few months remained bullish and if the trend continues, it would likely increase this week as well.

US ISM Non-Manufacturing PMI

On Wednesday, at GMT 3:00 p.m., the US based Institute for Supply Management (ISM) will release its monthly Non-Manufacturing PMI figure, which measures the level of a diffusion index created by surveying purchasing managers. However, the ISM’s PMI figure excludes the non-manufacturing sector.

Binary options investors consider the ISM Non-Manufacturing PMI figure to be a leading economic indicator because purchasing managers have the most updated view of the economy.

Last month, the ISM’s PMI figure came out at 52.9 and the forecast for this month is currently set at a slightly improved figure, at 53.5.

Trade Recommendation for the NZD/USD

NZDUSDDaily

Since the formation of a tiny bullish pin bar on May 30, 2016, the NZD/USD price has climbed around 615 pips, and formed a well-respected uptrend line in the process.

Last week, the NZD/USD price once again tested the uptrend line, but failed to break below it. Today, the NZD/USD price has gone up by 65 pips so far, and currently trading above the pivot zone around the 0.7225.

As the GDT price index has gone up twice in the last two months, there is a high probability that this bullishness would continue, which suggests a bullish fundamental outlook for the NZD/USD. However, the forecast for the US ISM non-manufacturing PMI is also set at a higher figure compared to last month, and if the forecast comes true, it would likely push the price below the 0.7225 level once again.

Regardless, if the NZD/USD closes above the 0.7225 level, it would likely attract additional bullish momentum in the market and offers traders an opportunity to place a CALL order.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the NZD/USD with their binary options brokers as soon as the price closes above the 0.7225 level.

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