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NZD/USD binary signal - New Zealand Food Price Index - 12 Mar 2018

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Signal details
Entry Price: 
0.7313
Close Price: 
0.7294
Direction: 
Put
Expiry Time: 
21:00 GMT
Result: 
ITM
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Statistics New Zealand will be releasing the monthly food price index data today at 21:45 GMT. Although the report is not a major market moving event, the preliminary data feeds into the overall quarterly inflation report. In January, food prices were seen advancing 1.2% on the month. But after a seasonal adjustment, food prices were seen falling 0.6% in January on an annual basis.

Consumer prices in New Zealand have been easing at a steady pace on the quarter. The last reported data showed that in the fourth quarter, New Zealand's consumer prices rose just 1.6%. This came after the previous quarter registered inflation growth of 1.9%. Consumer prices in New Zealand peaked at 2.2% in the second quarter of last year.

At the most recent monetary policy meeting few weeks ago, the Reserve Bank of New Zealand was seen keeping interest rates steady as it noted that the current accommodative monetary policy was supportive of the economy.

Expectations of a rate hike from the RBNZ continue to be pushed back amid the slow pace of inflation. The RBNZ targets an inflation band of 2% - 3%. Based on the latest data, the markets speculate that interest rates will remain unchanged until the second half of 2019.

In this context, a buildup of price pressures on the food could potentially stoke expectations of a possible build up in the consumer prices.

Based on the above, today's binary signal is NZDUSD. The currency pair was seen continuing to trade in a range and in the short term we expect to see a modest rally. With the resistance level seen at 0.7313 region, NZDUSD could consolidate at this level before reversing the gains.

Therefore, we would purchase daily PUT options in NZDUSD at 0.7313 for a 21:00 GMT expiry time. We expect NZDUSD to stall near the resistance and close lower on the day.

binary options signal nzdusd 12 mar 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.