New Zealand – Food Price Index
Tomorrow, at 9:45 p.m., the Statistics New Zealand will release the food price index, which measures the changes in the price of food and food services bought by households in the country over the past month.
Binary options investors pay special attention to the food price index because food price tends to be highly volatile in New Zealand and any sudden change can have a noticeable impact on the overall inflation situation in the economy.
Last month, the food price index in New Zealand came out at -0.2%. The food price index has been declining for last several months and if the trend continues, it would likely be a negative figure this month as well.
United States – Unemployment Claims
On Thursday, at GMT 1:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.
Binary options investors consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending has direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.
Last week, the US unemployment claims figure came out at 285,000 and the forecast for this week is currently set at a slightly higher figure, at 287,000.
Trade Recommendation for the NZD/USD
After climbing around 400 pips since January 20, the NZD/USD found strong resistance around the 0.6725 level last week. As a result, the NZD/USD formed a bearish outside bar (BEOB) on last Friday, indicating a further price decline in this week.
As the food price index in New Zealand has been declining for the last few months, the New Zealand Dollar would likely remain “soft” and if the US unemployment claims figure come out better than expected, then the NZD/USD would likely attract additional bearish momentum in the market.
Under such circumstances, it is recommended that traders consider placing a PUT order for the NZD/USD with their binary options brokers once the price closes below the 0.6615 level.