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

Can A Stock Go Negative?

There are numerous professional stock traders who have made a name for themselves in the dynamic stock market. However, it is essential to keep in mind that the stock market is also prone...

Four Ways to Use Your Red Envelope Money as a Trader

Lunar New Year is a major historical and cultural festival celebrated by millions of people around the world, particularly the Chinese, Vietnamese, and Korean communities...

Three key aspects of a trustworthy broker

In recent years, trading on financial markets, especially Forex, has proven to be a viable and popular source of consistent gains with potential immediate returns. With that in mind, many aspiring traders embark on their journey in search of financial freedom — and inevitably face the challenge of choosing a broker they can rely on.

MetaTrader4 vs. MetaTrader5

A trading platform is basically a workspace for traders, their work environment. The quality of trading depends on its functionality and convenience. Many market...

All that glitters ain't gold

Amid all the commotion in the equities and cryptocurrency markets, the yellow metal has looked somewhat neglected of late. At the height of the coronavirus crisis, gold was...

Common Trading Mistakes Every Trader Should Avoid

Trading in financial markets can be both exhilarating and profitable, but it's essential to navigate this world with caution and discipline. Many traders, especially beginners, often fall into common pitfalls...

First steps of a trader. Where to start your Forex journey?

Welcome to the world of trading! You probably want to become more active in managing your finance and are now in doubts where to start. This article will guide...

Can you be a successful forex trader?

Whatever we do in life, success is not guaranteed. The only thing that matters is our performance. The same may be said for trading in the Forex markets...

What is a central bank?

A central bank is a financial institution that manages the monetary policy and currency supply of a country or group of countries. It is typically responsible for maintaining...

What is a Share Split?

Companies may occasionally, conduct share splits, this is when the company lowers the price of its shares by splitting each existing share...

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...

An Introduction to Contract for Difference (CFD) Trading

Contract for Difference, or CFD is an agreement made between two parties, the buyer and the seller (CFDs broker and client), stating that the buyer should pay...

LegacyFX: Commodity trading benefits

CFD Trading is a derivative financial instrument, and it is an abbreviation for "Contract for Difference". CFDs are of interest to traders who want to boost the amount and quality of their...

Trading on Forex: A Primary Source of Income

There are a lot of discussions about trading within the boundlessness of the Internet, both in conventional businesses and state-financed organizations. People say...

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...

Relative Strength Index (RSI): Unveiling Price Momentum and Overbought/Oversold Conditions

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. Developed by J. Welles Wilder, RSI ranges from 0 to 100...

What is stock split and stock split reverse?

Apple, Amazon and Tesla have all split their stocks in the past in order to make their shares more accessible to retail investors. In the following article you will learn what a stock split is...

Everything You Need to Know About Cryptocurrencies

The concept of money as we know it has evolved in recent years from purely physical money to a combination of the physical; digital representations of physical money...

Litecoin Trading: A Brief Guide for Beginners

Litecoin (LTC) is one of the oldest and most popular cryptos on the market. It is often called "digital silver to Bitcoin’s gold", and for good reason. On the technical side, both cryptos...

What are penny stocks?

Penny stocks, also known as “junk” stocks, are securities of small or problem-riddled companies that usually trade at a price of less than $5. They are not frequently-traded stocks...