NZDUSD May Turn Bearish if Key Support Near 0.7215 is Broken

NZDUSD – Binary Options Technical Analysis.

United States – Institute for Supply Management (ISM) Manufacturing PMI

Yesterday, at GMT 3:00 p.m., the Institute for Supply Management released its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.

Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, binary options investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.

Last month, the ISM manufacturing PMI for the United States came out at 49.4 and the forecast for this month was set at 50.4. However, the actual figure came out slightly better, at 51.5.

New Zealand – GDT Price Index

Later in the day, at 3:06 p.m., 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 traders 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 came out at a 1.7% increase. But, this this month the index declined by around 3% putting a bearish pressure on the New Zealand Dollar.

Trade Recommendation for the NZDUSD

NZDUSD - Technical Analysis for Binary Options and Forex

After breaking above the downtrend line on May 31, 2016, the NZD/USD has been on a steady uptrend that formed a well-respected uptrend line in the process.

After climbing up by around 700 pips over the last few months, NZD/USD finally started a retracement at the end of August and last week, the pair broke below the uptrend line. However, the price soon found strong support around the 0.7215 level and so far, has remained range bound.

As the New Zealand GDT price index came out much lower than the previous period, the fundamental outlook for NZDUSD would likely to remain bearish. Moreover, the NZDUSD price is trading near the upper end of the range and so far, declined by around 55 pips today. There is a good chance that the pair would retest the 0.7215 level this week and if the support is broken, it would attract additional bearish momentum in the market.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the NZDUSD with their US binary options brokers as soon as the price closes below the 0.7215 level on the daily time frame.

Top Binary Brokers to trade NZDUSD

Top US Broker: BinaryMate

US Regulated Broker: NADEX

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