Forex for Beginners Advanced Forex Forex Strategies

Technical Analysis Forex Signals Forex Education

AUD/USD correlation explained

The AUD/USD correlation reflects how many US dollars are needed to buy one Australian dollar. It means that if the currency pair is traded at 0.85, then $0.85 is required to buy one Australian dollar. In this currency pair, the US dollar is a counter currency and the Australian dollar is a base currency.

Using AUD/USD correlation to advantage

Generally, the correlation of two currencies occurs when the price changes in close relationship with each other. There is a positive correlation, in which the price of currency pairs changes in the same direction, and negative when the price moves in a different direction. It is significant for traders to understand the relationship between AUD and USD, as currency correlation can affect the results and potential risks of trading.

Factors influencing AUD/USD correlation

Every day, something new happens in the global economy, and the market reacts to any event, and the international currency market is no exception. AUD/USD correlation is volatile. The correlation of the currency pair s is mainly determined by the current state of the financial market. Therefore, under the influence of changes, the correlation also changes, and this process can be analyzed for forecasting the direction of price movement when concluding CFDs. There are several reasons why the correlation coefficient changes. This includes geographic factors such as the production of commodities in Australia, political factors, and the impact of interest rates.

Traders should also be aware of how currency and commodity rates compare. Knowing about the correlation between currencies and commodities makes it possible to manage investments more efficiently. Regardless of the strategy chosen, trades should consider the correlations, since they allow them to detect trends at an early stage and take advantage of profit opportunities.

There are special tables of coefficients that a trader can use when building a trading strategy. To see the relation between two currency pairs, it is enough to look at their correlation over a long period.

Assets which influence AUD / USD correlation

Some asset categories have an impact on AUD/USD correlation and here are they:

Currencies: NZD and JPY; and also currency pairs EUR / USD, GBP/USD, USD/JPY, NZD/ USD, USD/CAD, GBP/JPY, EUR/JPY and USD / CHF.
Commodity assets: gold, iron ore, and natural gas.
Bonds: Australian 10-year government bonds (GACGB10), 10-year US government treasuries (Treasuries), 10-year New Zealand government bonds (GNZGB10).
Indices: S & P / ASX 200 Index and S & P / TSX Global Gold Index.

AUD/USD trading strategy

The trading strategy is almost common to all currency pairs and is based on making decisions based on the analysis of different time frames. This, of course, can be applied to the AUD/USD currency pair as well.

To trade AUD/USD investors can use the same strategies as for the EUR/USD currency pair. First of all, these are trend-following strategies. The pair has a noticeable correlation with gold, USD/CAD, AUD/CAD, EUR/USD, and USD/JPY. When using multicurrency analysis, traders should keep an eye out for these tools when determining the direction to trade the Australian dollar.

AUD / USD correlation weekly forecast

Weekly reviews of the Australian dollar against the US dollar are published on Friday towards the end of the trading week. As a rule, for the analysis, the daily AUD / USD chart is taken, which can reflect medium-term trends and through the analysis of which the traders of our portal make the AUD/USD forecast for the week.

Trading AUD/USD correlation with InvesTlite

The AUD / USD currency pair represents the value of the Australian dollar expressed in terms of the value of the US dollar on the foreign exchange market. The AUD USD pair is popular and arouses interest among traders and analysts around the world due to its features and correlation with commodities. AUD/USD is a prospective financial instrument that can ensure an effective trading experience in combination with InvestLite trading conditions.

FAQ

What is the best time to trade AUD/USD?

In general, you can trade around o clock, but there are prime times to trade the AUD/USD when the currency pair is more volatile. For AUD/USD it is between 19:00 and 04:30 (GMT).

Are Australian and US dollars the same?

No, Australian and US dollars are different and belong to different countries, as well as their rates also differ, which makes their value not the same.

#source

What Is a CFD? Contracts For Difference Explained

CFD trading may not sound like much at first, but it opens traders up to an entire world of possibility in terms of trading assets and finance. CFD is an abbreviation...

Guide to Forex Trading Costs: Unraveling the Fees

Forex trading, much like any financial venture, comes with its own set of costs. Grasping these costs is crucial for every trader, as it not only influences their bottom line but can also provide..

What are silver investments?

Silver investments are precious metals assets characterized by their availability and their potential to expand and diversify the investor's portfolio. There are many options...

How To Invest in NFTs: NFT Investing for Beginners

If you have been paying attention to the crypto markets for any length of time, you have likely come across the term "NFT", especially as there have been headlines of these...

How to Scale up a Small Trading Account in Forex?

Many aspiring Forex traders have one really important question: how to scale up a small trading account in Forex more successfully? This is an important question...

What are derivatives in finance?

When referring to derivatives, it is about financial agreement that establishes a value through the value of an underlying asset. This means that they have no value...

Trading 101: Trading with the Trend

Trading with the trend is favoured among traders as it allows them to make the most out of momentum in the markets. If you are new to trading, you can look...

IronFX: Leverage in Forex. Complete Guide

Leverage is simply borrowed funds that traders use to trade. In other words, it refers to the ability that traders have when opening an account with a forex broker...

Mastering Market Liquidity: What Is It And How To Make Use Of It

The term "liquidity" is constantly being tossed around in the finance industry, but what exactly does it mean? Today, we will explore the concept of liquidity, its importance in trading and investing...

How to Spot a Bull or Bear Market?

There are two important terms in financial markets that can help investors understand and react to certain situations. Both bull and bear markets describe how markets...

Best Currency Pairs to Trade and Live Happily Ever After

It is so easy to get confused in the world of financial volatility and numerous assets that the FX market offers for trading. We know what you feel. Often newbies...

Selecting Signals in Copy Trading

A few simple tips on how to choose profitable signals for a subscription in Copy Trading, and not to lose your money. These recommendations are also suitable for PAMM accounts...

An Introduction to Precious Metals

Precious metals have been used as an investment option as well as a method to store wealth, with gold being the most commonly used. Today there are many ways to trade...

Online vs. Offline Trading: Weighing the Pros and Cons

In today's digital age, trading options have expanded beyond traditional methods. With nearly universal access to the Internet, online trading has surged in popularity...

Forex Copy Trading: A Complete Guide

Copy trading is an increasingly popular trading strategy among forex traders. Like its name suggests, copy trading involves copying or following the trades made by other traders...

Can I become a millionaire trading FOREX?

Can I become a millionaire trading FOREX? Continue reading today's article to learn more! Yes, you can, BUT... it's essential to understand what you're doing, acknowledging, of course, the risks of trading...

What are some advantages of CFD trading?

Contract-for-difference (CFD) trading is a popular alternative to traditional investment. Over the past decade, its popularity has increased considerably while the specific features offered...

Reasons To Keep a Trading Journal

Why does a trader need a trading journal? It may seem like a simple question. Everyone knows: a trading journal is a tool that shows how many trades were placed...

Regulators Affecting the US Dollar

The value of the US Dollar can be affected by a number of different factors, such as the Central Regulator, also known as The Federal Reserve. The Central Bank...

Invaluable Tips on How to Choose the Best Forex Broker for Beginners in 2022

Why do people want to start trading foreign currencies on the global market that is commonly known as Forex? Some are tired of their mundane jobs where they get paid peanuts...