AUD/USD Price Likely to Find Resistance Near Key Pivot Zone

United States – The Conference Board (CB) Consumer Confidence Index

Today, at GMT 3:00 p.m., United States based Conference Board Inc. (CB) will release its consumer confidence index, which measures the changes in the level of a composite index by surveying 5,000 households in the United States.

The large sample size (5,000) of the survey makes it one of the most comprehensive research data regarding the consumer spending pattern in the country. Since consumer confidence is correlated with consumer spending, binary options investors pay close attention to the CB consumer confidence index.

Last month, the CB consumer confidence index reading came out at 90.4 and the forecast for December is currently set at 93.9.

Australia – Private Sector Credit

On Thursday, at GMT 12:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data, which measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.

Binary options traders consider the private sector credit to be an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.

In November, the private sector credit in Australia increased by 0.7% and the forecast for December is currently set at a slightly lower rate of increase, at 0.6%.

Trade Recommendation for the AUD/USD


Although the AUD/USD price broke the uptrend line on December 8, it remained mostly range bound over the last few weeks. On December 17, the AUD/USD price demonstrated some signs of bearish momentum, but it bounced from the support around 0.7100.

Yesterday, the AUD/USD tried to penetrate above the upper end of the range, but once again the price was capped around the strong resistance zone near the 0.7280 level.

As the Australian private sector credit is expected to increase a lower rate this month compared to November, the fundamental outlook for the AUD/USD would likely remain bearish this week. Furthermore, from a technical point of view, yesterday’s bearish price action suggests that the AUD/USD price would likely to remain within the range.

Under the circumstances, it is recommended that traders consider placing a PUT order for the AUD/USD with their binary options brokers once the price penetrates and closes below yesterday’s low, which is at 0.7244.

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 write on various tech and financial topics. You can reach him at [email protected]
Asif Imtiaz

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