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AUDUSD AUD/USD
Australian Dollar to US Dollar
Australian Dollar to US Dollar
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The AUD/USD formed the double top technical pattern on H4 timeframe, following a breakdown through the 0.6570 low of November 30. Traders initially were repositioning ahead of the Reserve Bank of Australia's (RBA) policy rate meeting this Tuesday, so that the Greenback began to recover from its four-month low, also led by U.S. Treasuries yield's moderate bounce. More than 100 basis points of potential interest rates cuts by the Fed in 2024 are only wishful thinking now, as they are not given or guaranteed, but could be mostly priced-in. The Fed itself does not confirm its supposed stance reversal. Meanwhile, the RBA released a more or less dovish statement. After leaving its base interest rate unchanged at 4.35%, it shared a comment that economic data has aligned with the RBA's own projections, which may be interpreted as a key to the market's conception that any extra rate hikes now look unwarranted. In my view, it was less hawkish at least, compared to November statement. If markets feel that the hike cycle is over, then AUD/USD would be poised to test a 0.6510-0.6535 technical area as its nearest targets with a maximum double top measured goal of around 0.6475.
Australian Dollar to US Dollar
- It is a commodity currency, that is, it is driven by prices on commodities. Australia is rich in minerals, metals, fuels, and extensively exports to the Asian region. The country is the third largest producer of gold. So, AUD/USD is largely affected by gold prices. It also exports crude oil and petrochemicals, metal ores, precious stones, and agricultural products. An increasing demand for these items makes the Aussie exchange rate stronger, and vice versa. The Thomson Reuters/Jefferies CRB Index may indicate a possible direction of the Aussie. The more the index rises, the more AUD/USD goes up, and the more the index descends, the more the Aussie weakens;
- The Aussie is a risky asset as it is commodity-driven. The increase of risk appetite and improving market sentiment positively affect the currency exchange rate. Rising business activity, rising GDP in developed nations, monetary easing by major central banks, lower borrowing rates, and geopolitical risks strengthen the Aussie. The CBOE Volatility Index (VIX) has a significant correlation with the Aussie. The lower the index, the stronger the AUD/USD;
- The Australian economy is heavily linked to China as it is its major trading partner. Australia has 25% of its exports send to China, so the country is extensively exposed to China’s economic perspectives. Rising economic activity in China increases Australian exports, and eventually strengthening the Aussie. So, the currency is very sensitive to China’s GDP, production, foreign trade, and political issues;
- Australia has a positive trade balance. So, a weaker Aussie makes exports more profitable. Thus, the Reserve Bank of Australia (RBA) is trying to keep its interest rates lower than the Federal Reserve (Fed). The downside trend for the AUD/USD has been prevailing over recent years;
- The U.S. Dollar is dominating in this pair. So, the Greenback has a stronger effect on the pair. Thus, dollar-related drivers should be monitored very carefully;
- The Aussie, like Asian currencies, is most actively traded during night-time in Europe. Economic data that is related to the Aussie is also released during night time. So, alleviated volatility is likely to emerge during that time in case of a market-moving event.
| Ticker | AUDUSD AUD/USD |
| Contract value | 100000 AUD |
| Maximum leverage | 1:500 |
| Date | Short Swap (pips) | Long Swap (pips) | No data |
|---|
| Minimum transaction volume | 0.01 lot |
| Maximum transaction volume | 70 lots |
| Hedging margin | 50% |
| USD Exposure | Max Leverage Applied | Floating Margin |
|---|
