Technical Analysis of the AUDUSD Currency Pair


The AUDUSD pair is approaching a critical Fibonacci support level. It has also pushed through the 61.8% retracement of its last daily advance. Furthermore, the 20 SMA has been rapidly declining above the current level and is now converging with the 0.6960 Fibonacci resistance level. Technical indicators point to strong selling interest, and indicate that the AUDUSD is likely to break below the current level.

The AUD/USD currency pair is a risk-linked currency and is highly responsive to market sentiment. It tends to rise during favourable market conditions and fall during periods of broad-based market headwinds. It can also respond to the price of Australia’s main exports. In addition to this, the pair’s volatility may be influenced by news releases. For this reason, it is vital to develop a robust money management strategy.

Other factors that may affect AUD/USD include trade relations. The trade relationship between Australia and Asian countries is important to the Australian dollar. Also, interest rate differentials between Australia and the U.S. affect the value of the AUD/USD. Generally speaking, a higher interest rate in Australia will make it more attractive. On the other hand, a lower interest rate in the United States could make the Australian dollar less appealing.

The Australian-US free trade agreement has a significant impact on the AUD/USD currency pair. The two countries are trusted trading partners, and this has boosted Australian exports in the United States. In fact, the US has invested over $1 billion in Australian companies since the ratification of the free trade agreement.

The Reserve Bank of Australia’s (RBA) releases its short-term interest rate and monetary policy guidance on the first Tuesday of every month. A dovish or hawkish statement by the RBA could cause the AUD/USD to fall or rise. However, if the RBA keeps its policy rates unchanged, the Aussie is likely to rise.

Australia’s resource-driven economy depends heavily on global growth and commodity prices. If Australian exports grow well, investors will likely take on more risk and buy more Australian dollars. Changes in risk sentiment and speculation also affect AUD/USD. This makes it one of the most closely tracked currencies in the world. Therefore, it’s important to understand the AUDUSD to avoid losing money and reap the rewards of a successful investment.

The Australian dollar has become popular since the global economic crisis in 2008. The RBA has limited intervention in the market, making it attractive for FX traders. However, investors should be wary of strong reversing trends. Remember that the AUDUSD currency pair is highly volatile and carries substantial financial risk. Even with minimal RBA intervention, the AUDUSD exchange rate can drop dramatically, leading to massive financial losses for traders.

The Australian dollar and US dollar currency pair is a major group of currencies in the forex market. As the fifth most traded currency in the world, it also enjoys very tight spreads. On most forex brokers, AUDUSD typically stays within a 1 to 3 pip spread range. The AUDUSD exchange rate tends to fluctuate rapidly during the Asian trading session, which encourages traders to enter positions on this pair.