Trading AUD/USD

The popularity of the AUD/USD currency pair, otherwise known as the ‘Aussie’, has surged in recent years. As a result of Australia’s commodity boom in recent decades, the pair now unites two expanding and influential economies. This page will break down everything you need to know about the AUD/USD pair, from its benefits and drawbacks to currency correlations, history and strategy, including trading hours, signals, charts and top tips.

AUD/USD Trading Brokers

OANDA US - OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.
Vantage - Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.
IC Markets - IC Markets maintains its commitment to providing exceptionally tight 0.0-pip forex spreads on major currency pairs such as EUR/USD. This makes it an excellent option if you are seeking superior execution, with an average of 35 milliseconds. Additionally, if you are a high-volume trader, you can benefit from rebates of up to $2.50 per forex lot.
AvaTrade - AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.
FOREX.com - FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.

Trading AUD/USD Comparison

Trading AUD/USD Comparison
Forex Assets	EUR/USD Spread	Forex App Rating	Minimum Deposit	Regulator	Visit
65+	1.6	4 / 5	$0	NFA, CFTC	Visit
55+	0.0	4 / 5	$50	FCA, ASIC, FSCA, VFSC	Visit
75	0.02	4.8 / 5	$200	ASIC, CySEC, FSA	Visit
50+	0.9	4.3 / 5	-	ASIC, CySEC, FSCA, ISA, CBol, FSA, FSRA, BVI, ADGM	Visit
80+	1.2	4.9 / 5	$100	NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA	Visit
100+	0.1	4.7 / 5	$0	FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB	Visit
55+	1.6	4.7 / 5	$5	ASIC, CySEC, DFSA, FSC, FSCA	Visit
50+	0.0	3.6 / 5	$100	ASIC, FCA, xCySEC, SCB	Visit
45+	Variable	3 / 5	$0	-	Visit
60+	14 pips	4.5 / 5	$10	-	Visit
50+	1.2	4 / 5	$10	FSC, FSA	Visit
70+	1.58 pips (Ave)	2.5 / 5	$100	FCA, CySEC, FSCA, SCB, FSC	Visit
70+	0.2	3.4 / 5	$0	CySEC	Visit
70+	1.0	4.8 / 5	$0	FCA, CySEC, KNF, CNMV, DFSA, FSC	Visit
60+	0.6	5 / 5	$100	FCA, ASIC, CySEC, DFSA, MAS, FSA, FSCA, FMA, EFSA	Visit

#1 - OANDA US

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Review

Why We Chose OANDA US

OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.

"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
- DayTrading Review Team

GBPUSD Spread: 3.4
EURUSD Spread: 1.6
EURGBP Spread: 1.7
Total Assets: 65+
Leverage: 1:50
Platforms: OANDA Trade, MT4, TradingView, AutoChartist

About OANDA US

OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.

Pros

Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
There's a strong selection of 68 currency pairs for dedicated short-term forex traders
The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView

Cons

There's only a small range of payment methods available, with no e-wallets supported
It's a shame that customer support is not available on weekends
The range of day trading markets is limited to forex and cryptos only

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#2 - Vantage

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Review

Why We Chose Vantage

Vantage offers 55+ currency pairs - above the industry average, so experienced traders can explore plenty of opportunities. Vantage's deep liquidity pool provides forex spreads from 0.0 pips in the ECN account, lower than many alternatives. There are also no commissions, deposit fees or hidden charges.

"Vantage remains an excellent option for CFD traders seeking a tightly-regulated broker with access to the reliable MetaTrader platforms. The fast sign-up process and $50 minimum deposit make it very straightforward to start day trading quickly."
- DayTrading Review Team

GBPUSD Spread: 0.5
EURUSD Spread: 0.0
EURGBP Spread: 0.5
Total Assets: 55+
Leverage: 1:500
Platforms: ProTrader, MT4, MT5, TradingView, DupliTrade

About Vantage

Founded in 2009, Vantage offers trading on 1000+ short-term CFD products to over 900,000 clients. You can trade Forex CFDs from 0.0 pips on the RAW account through TradingView, MT4 or MT5. Vantage is ASIC-regulated and client funds are segregated. Copy traders will also appreciate the range of social trading tools.

Pros

Vantage caters to hands-off investors with beginner-friendly social trading via ZuluTrade & Myfxbook
The broker has recently made efforts to expand its suite of CFDs providing further trading opportunities
It’s quick and easy to open a live account – taking less than 2 minutes

Cons

The average execution speeds of 100ms to 250ms are slower than alternatives based on tests
Unfortunately, cryptos are only available for Australian clients
A steep $10,000 deposit is needed for the best trading conditions, which include the $1.50 commission per side

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#3 - IC Markets

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Review

Why We Chose IC Markets

IC Markets maintains its commitment to providing exceptionally tight 0.0-pip forex spreads on major currency pairs such as EUR/USD. This makes it an excellent option if you are seeking superior execution, with an average of 35 milliseconds. Additionally, if you are a high-volume trader, you can benefit from rebates of up to $2.50 per forex lot.

"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."
- DayTrading Review Team

GBPUSD Spread: 0.23
EURUSD Spread: 0.02
EURGBP Spread: 0.27
Total Assets: 75
Leverage: 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade

About IC Markets

IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.

Pros

With ultra-fast execution speeds averaging 35 milliseconds and deep liquidity, IC Markets provides an optimal trading environment for scalpers, hedgers, and algorithmic traders.
IC Markets offers among the tightest spreads in the industry, with 0.0-pip spreads on major currency pairs, making it especially cost-effective for day traders.
You have access to over 2,250 CFDs across various markets, including forex, commodities, indices, stocks, bonds, and cryptocurrencies, allowing for diversified trading strategies.

Cons

While IC Markets offers a selection of metals and cryptos for trading via CFDs, the range is not as extensive as brokers like eToro, limiting opportunities for traders interested in these asset classes.
Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.
Despite four industry-leading third-party platforms, there is no proprietary software or trading app built with new traders in mind.

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#4 - AvaTrade

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Review

Why We Chose AvaTrade

AvaTrade offers 50+ currency pairs with competitive spreads from 0.9 pips and zero commissions. You can trade majors, minors and exotics around the clock on industry-leading platforms, including MT4 and MT5. Traders can also access beginner-friendly trading tools and comprehensive forex education.

"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."
- DayTrading Review Team

GBPUSD Spread: 1.5
EURUSD Spread: 0.9
EURGBP Spread: 1.5
Total Assets: 50+
Leverage: 1:30 (Retail) 1:400 (Pro)
Platforms: WebTrader, AvaTradeGO, AvaOptions, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade

About AvaTrade

AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.

Pros

Automated trading is supported through MetaTrader Expert Advisors (EAs), as well as the AvaSocial and DupliTrade tools
The broker’s unique risk management tool, AvaProtect, protects against losses up to $1 million and is easy to activate in the platform
The broker offers reliable 24/5 multilingual customer support with fast response times during testing

Cons

Traders from the US are not accepted
It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here
There’s an above-average $50 inactivity fee after three months, though this won't impact active day traders

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#5 - FOREX.com

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Review

Why We Chose FOREX.com

FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.

"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."
- DayTrading Review Team

GBPUSD Spread: 1.3
EURUSD Spread: 1.2
EURGBP Spread: 1.4
Total Assets: 80+
Leverage: 1:200 (Retail), 1:500 (Pro)
Platforms: MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral

About FOREX.com

Founded in 1999, FOREX.com is now part of StoneX, a financial services organization serving over one million customers worldwide. Regulated in the US, UK, EU, Australia and beyond, the broker offers thousands of markets, not just forex, and provides excellent pricing on cutting-edge platforms.

Pros

Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.
FOREX.com offers industry-leading forex pricing starting from 0.0 pips, alongside competitive cashback rebates of up to 15% for serious day traders.

Cons

Funding options are limited compared to leading alternatives like IC Markets and don’t include many popular e-wallets, notably UnionPay and POLi.
FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.

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Chart

Breaking Down ‘AUD/USD’

Before we get into the details, what precisely does AUD/USD mean? Quite simply, the exchange rate tells you how many US dollars (the quote currency) are required to purchase one Australian dollar (the base currency).

The AUD/USD pair is now the fourth most actively traded currency pair. In recent years, the AUD/USD has seen months where it represents around 7% of total forex market turnover. However, it is not one of the six that form the US dollar index (USDX).

Why Day Trade AUD/USD?

Before we consider AUD/USD day trading strategies and fundamental analysis, why should you opt for this particular currency pair when there are so many options currently available?

Volatility – As a result of the high-interest rate differential between Australia and the US, day traders can benefit from high levels of both volume and volatility. This could mean greater opportunities to turn profits. In bull markets, the AUD/USD pair run upwards much quicker than other pairs, whilst in bearish market environments, it can drop much sooner.
Major currency performance – In recent years the Australian dollar has become the highest performing major currency. It has seen an increase of in excess of 30% over the US dollar.
Economic stability – Data has shown the Australian economy has surged through exports and commodities, whilst retaining a solid foundation with a central bank. The Australian economy has even managed to grow year on year, whilst other economies have suffered at the hands of a global economic downturn.
Trading relations & GDP – The trading relationship with China allowed the Australian economy to avoid the global financial crisis. Plus, Australian GDP is on the rise. All of this makes investing in these powerhouse economies an attractive proposition.
Diverse market – Due to the AUD/USD’s increasing popularity, individuals can benefit from a number of different trading vehicles, from ETFs to E-micro futures, options, and more.
Research and resources – Daily and weekly analyses are far easier today thanks to the range of resources available. Websites and forums offer market overviews and analysis. Sophisticated live streaming charts and graphs are now highly customisable. You can get bespoke indicators, as well as 1-minute, 5-minute, 15-minute, and 1-hour charts.

Drawbacks & Risks

Despite AUD/USD statistics demonstrating promising growth and attractive trends, there remain several drawbacks and risks to trading with this currency pair.

Stability misconception – Traders often take for granted the power and stability of the US economy over other economies, such as Australia. However, because this is a cross pair, you need to ensure you analyse both economies against each other. Not keeping up-to-date with political and economic sentiments in both could lead to costly mistakes.
Volatility – Part of the allure of the AUD/USD currency pair is the promise of volatility. However, these sharp moves can also lead to significant losses. So, if you do invest substantial capital into this pair, one of the top trading tips is to employ an effective money management system.
Leverage – Trading on margin allows you to borrow funds to maximise your position. But whilst this may bolster potential profits, it could also amplify losses.
Automated competition – You may have attractive bid-ask offer spreads and all the bar charts and graphs in real-time in front of you. However, you are now competing with more sophisticated trading algorithms than ever before. This means asserting an edge when you’re live chart investing is increasingly difficult.

Influences on Movement

By reviewing AUD/USD relationship through long-term data, it is clear there are several main factors that influence prices. These include:

Commodities & Trading

Commodity prices – The Australian economy, to a certain extent is shaped by its significant role in commodities. They are the largest coal and iron ore exporter. So, when commodity prices rise, the Australian dollar often strengthens. When there is a fall in the price of commodities, the Australian dollar weakens. This was demonstrated in 2015 when commodity prices slumped and the Australian dollar fell by over 15% against the US dollar. In fact, it almost reached parity against the New Zealand dollar (NZD), which has not happened since the 1970s.
Trading relations – This is particularly important for the Australian dollar. The Australian economy is closely linked to trading relationships in Asia. So, changes in commodity demand from China, India, and to some extent Japan, can all cause the strength of the Australian dollar to increase or subside.

Other Influences

Interest rate differential – Interest rate decisions laid out by both the Federal Reserve (Fed) and the Reserve Bank of Australia (RBA) can impact AUD/USD rates and prices. For example, the Australian economy is currently performing well, so the Australian dollar looks set to continue increasing in value.
Economic indicators and data – Price action often centres around the release of key economic data and indicators. So, news announcements and reports on GDP, retail sales, inflation, trade balances, and industrial production, can all trigger movement in the AUD/USD currency pair.
Inflationary pressures – Normally, high commodity prices create recessionary pressures on developed nations. This can lead to concern over the sustainability of economies in North America and Europe, for example. When this happens, the Australian economy emerges as a beacon of hope, which again can strengthen its currency’s value.
Political announcements & natural disasters – Major political elections, new policies, wars, terrorist incidents, plus natural disasters, can all lead to serious fluctuations within the AUD/USD.

So, whilst day trading the AUD/USD pair calls for technical analysis via daily, weekly, and monthly price charts, it also demands an understanding of the underlying economic forces at play.

Currency Correlations

Part of your AUD/USD trading view also needs to take into account relevant currency correlations. The success and failures of certain pairs will influence others.

Correlation is a measure ranging from -1 to +1, which determines whether the pair is positively or negatively correlated. Correlations can also change over time.

Positive correlation – This is simply when pairs move in tandem with each other. The AUD/USD, GBP/USD, and EUR/USD FX pairs are positively correlated. This is a result of the US dollar being the counter currency. So, all pairs will reflect changes in the US dollar.
Negative correlation – This is when forex pairs move in the opposite direction. For example, USD/CHF, USD/JPY, and USD/CAD pairs. This is because the US dollar is the base currency.

Note the correlation with the USD/CAD pair may also be partly attributed to the positive correlation between the Australian and Canadian economies, as both are heavily involved in commodity exports.

Gold Correlation

Another important area is AUD/USD correlation with gold. Gold has a positive correlation with AUD/USD. So, when gold is going up, AUD/USD goes down. When gold goes down, AUD/USD goes down.

What does this mean for you? It means you can look at the movement in gold markets to make AUD/USD forecasts for tomorrow. So, get up currency correlations in a yearly chart and your future outlook could be seriously enhanced. Even looking at movement last week or in recent market hours may suggest price action is imminent.

AUD/USD Day Trading Strategy

Regardless of whether you opt for a breakout or scalping strategy, there are a number of factors to consider below that could enhance your intraday trading performance.

Timing

Regardless of what strategy you use for live, online AUD/USD day trading, knowing the best time to trade could make all the difference to your end of day profits. Whilst 24/7 forex trading is available, certain time periods will offer the greater levels of volatility and volume needed to generate substantial profits.

You will find the biggest daily moves and greatest volume during Australian working hours (overlapping with the Asian trading session), plus during the most active US trading hours. Economic reports, such as non-farm payrolls, durable goods orders, and consumer inflation data, can also all trigger significant spikes and shifts.

So, for the greatest volatility, focus your attention on day trading between 00:00 and 02:00 GMT, plus 06:00 to 08:00 GMT. Then for the most volume and trade activity, head back online between 12:00 and 17:00 GMT.

News

There are a number of different approaches you can take day trading on the AUD/USD currency pair. Some will utilise historical price charts and basic daily charts, whilst others will make their expectations based on news updates.

Market sentiment and price action can quickly shift with breaking news. If you can anticipate where the trend will head, you can capitalise on these news updates.

To do that, you need to have reliable news resources you can turn to. Some of the most highly regarded include XE, CNBC, Reuters, Bloomberg, Forex Factory, Yahoo Finance and Google Finance. These can prove invaluable. On top of standard AUD/USD commentary and the latest technical analysis, they can also offer the following:

Exchange rate history
Predictions and forecasts for today
Daily and monthly moving averages
AUD/USD specific trading definitions
Long-term charts, averages and outlooks
Daily, weekly, and monthly data and forecasts
1-year, 5-years, 10-years, 20-years, and 50-years charts
Short-term AUD against USD trend predictions and forecasts

Many of the above sources will also have obscure trends and unusual daily moves explained by experienced FX traders. So, used correctly, the news today is a powerful weapon to add to your day trading arsenal.

Example

Breakout strategies are often thought to be effective techniques for capitalising on fluctuations when the AUD/USD currency pair is considered so volatile. After monitoring support and resistance, positions should be entered in anticipation of a break. If the price continues in this direction, you can hopefully profit.

Reversal at Support/Resistance

Look no further for a straightforward AUD/USD day trading strategy. Support or resistance could be a horizontal or diagonal line, but it is the point that price has reversed off at least twice before. This should include the starting point of your support/resistance line.

It’s worth noting support and resistance are usually areas, instead of specific prices. So, your trade setup can actually take place slightly above or below.

The support and resistance then tell you to be ready because a reversal or breakout could be fast approaching. You would then need to wait for consolidation near your support/resistance. If the price breaks above a consolidation near support or breaks below a consolidation near resistance, then you have your trade signal.

When the reverse signal does then occur, take your trade when the price moves just above the consolidation near your support, or just below consolidation near your resistance. If your AUD/USD pattern does indeed appear, you are anticipating the price will ricochet off support or fall off resistance.

However, if the price fails to do that and instead breaks above the major resistance area, or breaks below the major support area, then you should exit the trade as soon as possible.

Risk Management

AUD/USD discussions often focus on buy and sell rates, hourly forecasts, opening and closing positions, daily ranges, but not on how to mitigate risk. It doesn’t matter if it’s the lowest or highest-ever historical prices today, without an effective money management system you may not still be in the game next week.

So, what precisely is an AUD/USD risk system? Its meaning is simple. It is a way of protecting against losses by pre-determining position size. Most traders recommend risking no more than 1-2% of your account balance on a single trade.

For example, if you have $10,000 in your account, you wouldn’t bet more than $100 to $200 on a single trade. That way even if you lose, you still live to fight another day. This basic technique could prevent you from sinking into the red.

As famous trader Paul Tudor Jones asserted, ‘risk control is the most important thing in trading.’

So, forget closing prices, buy/sell spreads and picturesque candlestick charts, sit down and determine your risk parameters first. Moving forwards and capitalising on the next rally with promising pip movement will be far easier if you still have capital left in your account.

Last Word on Strategy

Whatever your trading plan involves, from daily pivot points to scalping, employ your strategy at the most effective time. Plus, take into account the latest news updates and breaking announcements that may help you predict future price movement.

History

Early History

There was a time when the Australian dollar was connected to the British pound. The Australian dollar was at the mercy of the pound, rising and falling in tandem. Yet 1946 brought about a change. The Australian dollar was pegged to the US dollar for a short period before it returned to the British pound.

By the time 1966 rolled around, the Australian dollar was launched as a decimal currency, followed by the deregulation of Australia’s financial system. The result of this was significant price movement in global forex rates as the open-market system was now in the crosshairs of the country’s reserve bank.

It wasn’t until 1983 that the AUD/USD pair begin to display its strength. Copper, iron, and gold exports were partly behind this illustration of might. These represent approximately one billion Australian dollars and around half of the nation’s total exports.

As trading relations with China and other exporting became stable, the country and currency enjoyed consistent growth.

Recent History

Many traders do not realise how much your AUD/USD and forex outlook of today is shaped by past events. Understanding the context of this currency pair’s relationship may allow you to make more accurate exchange rate forecasts and predictions.

The Australian economy and the popularity of trading Australian dollar currency pairs has increased in recent years. In 2012, the AUD/USD pair was the third most popular currency pair in the world, jumping two places in just two years. A stable trading relationship with China, high-interest rates, plus commodity-exporting is partly to thank.

In fact, the Australian economy has grown year on year since 2001, facing just one obstacle during the 2008 global financial crisis. Of course, COVID-19 has also had a significant impact on the local economy.

Still, for the most part, minimal intervention from the RBA in the last ten years has attracted huge numbers of FX traders to the AUD/USD currency pair. However, surprisingly strong reversing trends when central banks make unexpected announcements can lead to traders suffering substantial financial losses.

Role of Australian Dollar

An important element of AUD/USD trading economics is recognising the role of the Australian dollar. Currency forecasts will reflect Australia’s economic influence.

Today Australia boasts the 13th largest economy in the world. In 2013 it had a GDP of an impressive $1.56 trillion. Services form 68.6% of GDP. Their most influential services include finance, media, education, and logistics.

However, as touched upon elsewhere on this page, the Australian dollar is a commodity-based currency. For example, you will see a high correlation with the prices of exported commodities, from coal and iron to copper and gold. The strength of the Australian dollar vs the US dollar is tied to the success of their exported goods.

So, the Australian dollar plays a huge role in international trade. As such, to make accurate predictions on your live forex chart, you should consider the following key indicators:

GDP
Trade Balance
Employment Change
Consumer Price Index (CPI)
Producer Price Index (PPI)

In addition, to find reports on their grain commodities, see Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES). Online you will find free data on crop planting, weather, harvests, mine output, plus other grain commodity statistics.

The Australian dollar also now plays an important role in the forex space. Because of the economy’s consistent strength, the Aussie is now the fifth most traded currency, playing a part in 8.6% of all FX trading.

So, the Australian dollar plays a vital role in international commodities trading, as well as forex trading. Plus, the Australian economy is one of a select few large economies still with a AAA Debt rating. This further highlights its political and economic stability. All of these factors will continue to attract aspiring AUD/USD traders.

Role of US Dollar

You cannot make accurate daily forecasts, let alone 3-month or 12-month AUD/USD forecasts without understanding the crucial role the US dollar plays. Their GDP represents around 25% of the global nominal GDP.

After China, the US is the second-largest trading nation in the world. They are also the second-largest manufacturer. In 2013, their industrial production was $2.43 trillion and greater than the output of Germany, France, India, and Brazil combined.

Below are just a few of the vital roles the US dollar plays:

Many global banks hold currency reserves in the US dollar.
87% of forex trades have involved the US dollar in recent years.
The US dollar is one of the most popular currencies used for international transactions.
Countries such as Algeria, Iran and the United Arab Emirates carry out oil transactions in the US dollar.
Some countries peg their own currency to the value of the US dollar, whilst others adopt the US dollar entirely.

When you consider the staggering size of the US economy and its numerous strengths, it’s straightforward to see how economic data on the US can impact the forex marketplace, and in turn, the AUD/USD currency.

Some of the top economic indicators that influence live FX exchange rates include Trade Balance, Consumer Price Index (CPI), Producer Price Index (PPI), Retail Sales and Consumer Confidence.

Your AUD/USD technical analysis should consider many of these data releases in the economic calendar. In addition, the Federal Open Market Committee meetings are held periodically each year, with press conferences, expectations and forecasts released every few weeks. Each announcement could potentially trigger shifts in the AUD/USD currency pair.

Final Word on AUD/USD Trading

The AUD/USD promises day traders all the attributes needed to generate substantial profits, including rich liquidity and volatility. However, this hunting ground comes with tough competition, so asserting an edge will require a number of elements.

Because it’s one of the seven major pairs that contain the US dollar, staying aware of both monetary policy and interest rates set by the Fed and RBA is crucial. Careful technical analysis, including real-time charts and the news, will all be needed to capitalise on those bullish or bearish patterns. Just as important though, is finding the best forex trading platform for your individual needs.

FAQs

What Is AUD/USD?

AUD/USD is the fourth most actively traded currency pair in the world. The exchange rate determines how many US dollars are needed to purchase one Australian dollar. AUD/USD is also a ‘major’ pair which means it includes the US dollar, is traded in high volumes and is highly liquid.

Why Should I Start Trading AUD/USD?

Since the Australian dollar is one of the highest performing major currencies, the AUD/USD pair enjoys high liquidity and volatility. The pair is also positively correlated with several other currency pairs, as well as commodities such as gold.

What Is The Best Trading Strategy For AUD/USD?

The best trading strategy for AUD/USD ultimately depends on each individual trader. With that said, it’s always important to consider the optimum times to trade AUD/USD, as well as the best new resources for fundamental analysis. Whether you’re conducting Elliott Wave analysis or support and resistance strategies, make sure to always implement proper risk management.

Where Can I Trade AUD/USD?

As is it one of the most popular major currency pairs, you can trade AUD/USD at virtually any online forex broker. To start analysing current AUD/USD charts and begin trading, you will need to register at your chosen broker and sign in to the trading platform.