EUR/AUD Bulls Tests Key Resistance Amid Forecast of Growing Unemployment in Australia
Last Updated on March 18, 2020
Australia – Unemployment Rate
On Thursday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the national unemployment rate. It measures the percentage of total unemployed work force over the past month.
The unemployment rate is an important fundamental indicators of the Australian economy for Binary options investors. It is because one of the main goals of the Reserve Bank of Australia is to keep the unemployment as low as possible. This is a lagging indicator. But, analyzing this data can help Forex traders predict future interest rates. Also, it can help forecast inflation situation in the country.
Last month, the unemployment rate in Australia came out at 5.1%. This month, analysts are expecting it to increase to 5.2%.
Eurozone – German Flash Manufacturing PMI
On Friday, at GMT 8:30 a.m., the Markit will release the German Flash Manufacturing PMI data. It measures the level of a diffusion index based on surveying around 500 purchasing managers in the country.
Binary options traders consider the Flash Manufacturing PMI figure as a leading indicator of the German economic climate. Because purchasing managers usually has the insight regarding business conditions such as employment, production capacity and new bulk orders and inventory situation.
Last month, the German Flash Manufacturing PMI figure came out at 45.3. This month, analysts are expecting it to come out at 44.8.
The EUR/AUD has fallen by around 500 pips since the start of February 2020. Over the last two weeks, the pair broke remained bearish and broke below the support around 1.6370 and 1.6230. However, earlier today, it started a bullish retracement. It tested the pivot zone around 1.6230. But, failed to break above it. Currently, it is trading around 65 pips below the daily high.
The Australian unemployment rate will likely go up from 5.1% to 5.2%. On the other hand, analysts are expecting the German Flash Manufacturing PMI reading to go down a notch to 44.8. While both economic events are worse for their respective currencies, the unemployment rate has a higher weighting. We believe it would set a bullish fundamental outlook for the EUR/AUD this week. Therefore, if the EUR/AUD closes above the resistance near 1.6230, it would likely attract additional bullish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities above this major resistance level around 1.6230.
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