On Sunday, at GMT 9:45 p.m., the Statistics New Zealand released the quarter-over-quarter retail sales figure, which measures the changes in the total value of sales made by the retail sector after adjusting for the inflation during the reported period.
Binary options traders consider the quarterly retail sales data of New Zealand as the primary gauge of consumer spending in the country. Hence, it acts as a vital leading indicator of the overall economy as well.
During the last quarter, the value of New Zealand’s retail sales increased by 1.6% and the forecast for this quarter was set at a lower level of growth, at 1.3%. The actual figure suggested that the value of New Zealand’s retail sales increased by as much as 1.7%, much higher compared to what the binary options market was expecting.
Later on Sunday, at GMT 11:50 p.m., the Japanese Cabinet Office released the quarter-over-quarter Preliminary GDP, which measures the changes in the inflation adjusted value of all goods and services produced by the Japanese economy over the reported quarter.
While the final GDP figure is more accurate, the preliminary GDP is released earlier. Hence, it tends to create more market impact compared to the final version of the GDP. Since GDP is used by the central bank of Japan to gauge the overall economic productivity in the country, binary options traders consider the GDP to be an important leading indicator of the overall economic situation in the country.
Last quarter, the Japanese preliminary GDP declined by as much as 0.5% and the forecast for this quarter was set at an increase of 0.9%. However, the actual Japanese preliminary GDP came out suggesting a slower, 0.6% growth.
The NZD/JPY has been in a free fall since the start of the year. Besides a brief retracement during the second week of January, it has been practically going down until the start of February. However, on February 3, the NZD/JPY formed a strong bullish outside bar (BUOB) and last week the price finally broke and closed above the sharp down trend line.
Earlier today, the NZD/JPY price broke above the resistance from last week, and currently looking forward to move towards the 61.8% retracement level of the previous downward swing, which is at 90.22. The 61.8% retracement level is also very close to the psychological resistance level around 90.50. Given that the Japanese preliminary GDP came lower than expected, it is likely that the NZD/JPY price will go up over the next few weeks.
Under the circumstances, it is highly recommended that binary options traders consider placing CALL orders around current price level with an expectation that the NZD/JPY price will remain above the 87.87 level over the next few days.