New Zealand – GDT Price Index
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Today, at GMT 2:49 p.m., the Global Dairy Trade released the GDT price index, which measures the changes in the average price of dairy products sold at auction in New Zealand.
Since the bulk of New Zealand’s exports to the world market consist of dairy products, the GDT price index acts as a leading indicator of the country’s trade balance because the rising price of dairy products ensures that foreign buyers have to purchase it at a higher price. Therefore, the binary options investors use this data to predict future trade balance, which helps in the valuation of the New Zealand Dollar against other major currencies.
On September 15, the GDT price index increased by 16.5% after increasing 10.9% on September 1. Today’s figures suggested that it went up an additional 9.9% over the last two weeks, which would be a positive development for the New Zealand Dollar against other major currencies.
Switzerland – Foreign Currency Reserves
On Wednesday, at GMT 7:00 a.m., the Swiss National Bank will release its foreign currency reserves figure, which measures the total value of foreign currency reserve held by the central bank.
The currency reserve usually goes down when the Swiss National Bank tries to defend the rate of the Swiss France in the open market, when the demand for the CHF is low. Hence, this figure can indicate how actively the central bank is participating in the market and. Hence, binary options investors consider this to be an important fundamental indicator of the CHF’s future directional movement against other major currencies.
In September, the Swiss foreign exchange reserves figure came out at 540 billion, compared to 531 billion in the previous month, which means the SNB is accumulating more currency reserves in order to keep the CHF from appreciating against major currencies. It indicates an increasing demand for the CHF.
Trade Recommendation for the NZDCHF
On Monday, after forming a flag pattern over the last several weeks, the NZD/CHF price finally broke and closed above the important resistance zone around 0.6300.
Although the Swiss foreign currency reserve has increased over the last two months, the binary options market gave more importance to the increasing GDT price index in New Zealand, which has been substantially increasing over the last few months as well. Hence, the NZD/CHF fundamental outlook changed from ranging to bullish and the price finally broke above the range.
Under the circumstances, it is recommended that traders consider placing a CALL order for the NZD/CHF with their binary options brokers at the current market price level.
The odds of winning in this trade would remain high as long as the trade (CALL order) is placed below yesterday’s high, which is at 0.6360.
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Tagged with: NZD/CHF • Trade of the Week
