If you’re looking for the perfect time to buy or sell the AUDUSD currency pair, it’s best to wait for a trend line to break before jumping in. This pattern occurs most often between 00:00 and 02:00 GMT, when the market is most volatile and volume is at its highest. Depending on your risk appetite, you can use a variety of approaches, including a basic daily chart and historical price data. Some traders rely solely on news announcements to make their decisions, since breaking news can shift market sentiment and allow you to capitalize on it.
Because Australia is a resource-driven economy, the AUD/USD is especially dependent on global growth and commodity prices. To help minimize risk, use a sophisticated AUD/USD trading platform. You can use CME-listed FX futures and options to manage your exposure to this currency pair. These instruments have convenient monthly, weekly, and quarterly futures and options, as well as the ability to trade via a central limit order book, direct with blocks, and EFRPs.
One of the most important reasons to buy the AUDUSD currency pair is the massive growth of China’s economy. The massive expansion in China coincides with the strengthening of the Australian dollar, and there are numerous headlines on the growth of this economy. Meanwhile, the RBA, Australia’s central bank, issues monetary policy guidance on the first Tuesday of each month. Depending on the tone of the RBA’s statements, the AUD/USD can move either way.
The AUD/USD currency pair’s recent advance suggests that it is merely a correction. It is still well over 100 pips below the firmly bearish 20 SMA, while longer moving averages remain firmly bearish. Moreover, the technical indicators are still in negative territory, including Momentum, which is on the verge of crossing the 100 line, and the RSI, which is currently at 40. Thus, it’s important to consider the direction of AUD/USD based on the economic data and market sentiment.
In terms of volatility, the AUDUSD fluctuates between 0.8300 and 0.6500. The Australian dollar is the fifth most liquid currency pairing in the world, accounting for almost six percent of all currency transactions. Its peg to the UK sterling pound has led to significant price movements in global forex rates. While it remains a strong commodity currency, it is also a riskier asset due to record low interest rates. Further, it is a proxy for the Chinese Yuan, which has significant influence on the Australian dollar.
Rising commodity prices weigh heavily on the economies of developed and developing countries. Because Australia’s economy relies so much on commodities, high prices in these markets are generally good news for the Australian dollar. Additionally, strong Asian demand for Australian commodities is good news for the Australian economy. Therefore, the Australian dollar has the potential to continue increasing in value as long as the Asian economy is healthy. That means that the time to buy the AUDUSD currency pair is right now.
The Australian-US economy is a major influence on the AUD/USD currency pair. The countries are trusted trading partners, with an economic relationship of nearly ten years and more than $860 billion. In fact, the US economy has invested more than $1 billion in Australia since the AUFTA came into effect. US exports to Australia have increased by two-and-a-half since 2005, and most commodities are denominated in US dollars.
Despite its popularity as an investment vehicle, it’s still not the best choice for investors. In order to make the most of the AUDUSD currency pair, you must first understand what it means by a rate-price quote. In this pair, one Australian dollar is worth the same amount of U.S. dollars. If you’re looking for a safe and profitable investment opportunity, it’s wise to use a trading platform that offers signals and currency correlations.
As a result, you can use these insights to make more informed predictions. The Australian dollar is heavily influenced by commodity prices, and currency traders will see this influence reflected in their forecasts. While the AUDUSD has been increasing steadily year-over-year, the Chinese economy has been slowing down and pushing down key commodity prices. With this in mind, it’s wise to trade on currency pairs that show the impact of the country’s economy.