AUD/USD Uptrend Line Broken Which May Attract Additional Bearish Momentum

Australia – National Australia Bank (NAB) Limited Business Confidence Index

On Monday, at GMT 1:30 a.m., the National Australia Bank (NAB) Limited released its monthly business confidence index figure. This figure measures the level of a diffusion index based on a survey of 350 businesses in Australia.

The survey asks respondents to rate the current business environment in Australia. Since businesses are the first to react to changing business conditions, the level of their sentiment regarding optimism and business confidence, binary options traders consider it as a leading indicator of the overall economic health in the coming months.

Last month, in April 2016, the NAB business confidence index came out at 6, and this month, it came out slightly lower, at 5.

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

Later, at GMT 2:00 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 51.8 and the forecast for this month was set at 51.0. However, the actual figure came out slightly lower, at 50.8.

Trade Recommendation for the AUD/USDAUDUSDDaily

 

During the last few months, the AUD/USD remained very bullish but found strong technical resistance near the 0.7675 level. Although the resistance was fierce, the pair kept respecting the uptrend line if formed during this mentioned timeframe.

Finally, yesterday, the AUD/USD broke below the uptrend line and the bears celebrated a decisive victory over the bulls.

Meanwhile, concerns regarding the US economy continued to grow as the ISM manufacturing PMI figure came out much worse than expected. However, from a technical point of view, yesterday’s bearish close below the uptrend line confirms that the intermediate trend has changed.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the AUD/USD with their binary options brokers at the current market price, as long as it is trading below the 0.7550 level.

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 write on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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