AUD/NZD Bearishness Likely to Continue as Australian Building Approvals Set to Decline

AUD/NZD – Technical Analysis for Forex Brokers.

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New Zealand – Unemployment Rate

Tomorrow, at GMT 10:45 p.m., the Statistics New Zealand will release the national unemployment rate of New Zealand.

The national unemployment rate measures the percentage of the total work force who were actively seeking employment opportunity during the previous quarter. The unemployment rate is usually considered as a lagging economic indicator. However, Forex traders consider it to be an important leading indicator as it indicates the future consumer spending in the economy as people with jobs and steady paychecks tend to spend more.

During the last quarter, New Zealand’s unemployment rate came out at 4.9% and the forecast is that the unemployment rate for this quarter would slightly improve to 4.8%

Australia – Building Approvals

Later on Thursday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.

Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, Forex investors consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.

Last month, the building approvals figure went up by 7.0% and the forecast for this month is currently set at a decrease of -1.7%.

Trade Recommendation for the AUD/NZD

AUDNZD - Technical Analysis for Australian Forex Brokers - Jan 30 2017

Although the AUD/NZD remained bearish since the end of October 2016, the pair broke above the downtrend line on January 4, 2017. However, as soon as the price reached near the resistance around 1.0545, it formed a bearish pin bar and resumed the downtrend.

Last week, the AUD/NZD broke below the support level near 1.0410 and today the price was once again got rejected from the 1.0410 level.

As the Australian building approvals figure is expected to decline by -1.7% over the last month and the unemployment rate of New Zealand is expected to come down to 4.8%, the fundamental outlook for the AUD/NZD would likely remain bearish this week. Hence, if the AUD/NZD price penetrates below the support near 1.0350, it would likely attract additional bearish momentum in the market.

Under the circumstances, it would be recommended that Forex traders consider placing a SELL order at market price for the AUD/NZD with their Forex brokers, as soon as it breaks below the 1.0350 level. A possible profit target for this trade would be around the 1.0275 level. On the other hand, Forex traders should consider placing a stop loss order above 1.0380.

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Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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