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NZD/USD binary signal - RBNZ monetary policy meeting - 08 Nov 2017

Signal details
Entry Price: 
0.6902
Close Price: 
No trade
Direction: 
Low
Expiry Time: 
21:00 GMT
How we trade
4.7/5 of 6 ratings

The Reserve Bank of New Zealand is expected to hold its monetary policy meeting later today at 20:00 GMT. Following the monetary policy meeting, an hour later the RBNZ Governor will be holding a press conference as well.

According to the economists polled, the central bank of New Zealand is expected to keep the official cash rate (OCR) unchanged at 1.75%. The RBNZ has left interest rates unchanged seven months so far and it could very well continue to keep monetary policy unchanged into next year.

Traders will be looking to the RBNZ's statement as they expect the central bank to turn dovish. In the previous monetary policy meeting, the RBNZ signaled numerous uncertainties to the economy and thus justified the accommodative monetary policy stance.

Over the past few weeks, the New Zealand dollar whose exchange rate was also a concern for the RBNZ came under pressure. Following the election results and the formation of a new government, the Kiwi dollar fell sharply. The new government is also expected to make major changes to the RBNZ's mandate which is also a cause for concern.

Thus, the central bank is very likely to continue with its stance of citing numerous uncertainties until the cloud clear. There is a possibility for the central bank to turn more dovish in the near term. The markets are pricing in a first rate hike from the RBNZ only in early 2019.

Thus the dovish outlook could further weigh on the New Zealand dollar. Based on the above, today's binary trading signal is NZDUSD. The currency pair was seen rising briefly towards 0.6940 level of resistance in the past few days before giving up the gains. This shows that the downside price action is likely to continue.

Therefore, we are looking to purchase daily PUT options at 0.6902 for 21:00 GMT expiry time. We expect to see NZDUSD to close bearish on the day with the RBNZ's decision.

binary options signal nzdusd 08 Nov 2017

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.