One commonly overlooked aspect of fundamental analysis is that many other traders might be reading and acting on the same reports at almost the same time. Within minutes of a new economic release going global, trading volumes can spike and prices react instantly. Traders slightly late to the party find only the already cold leftovers of fading price action. Obviously, the most profitable ‘Buy’ trade would be from a low priced currency pair before an unexpected rise. Is the Aussie dollar going to be the next surprise?
The Aussie dollar right now
The Australian dollar has been in a downturn since the big reversal of January, 2018. Starting with a rapid two-week crash, prices eventually fell from $0.81179 to just $0.69977. Q1 of 2019 didn’t see any major movements, and AUD continues to dance slightly above the low. Q2 is here, but there are no obvious signs of recovery… yet!
There’s a lot of speculation around why the downward trend has lasted so long, but none have been accepted by the main market analysts. Some say the Aussie dollar lacks interest rate support. But this weakness alone is probably not enough to prolong such low prices. AUD is far from showing up on the radar of hot market movers right now, but it may have a few surprises up its sleeve for the rest of 2019.
Speculation for Q2
Deputy Governor Guy Debelle of the Reserve Bank of Australia will soon announce details on the economic status of Australia, and he’s keeping the details of that announcement close to his chest. In general, Australia hasn’t released any positive news for over a year, so AUD traders are hoping for something significant in 2019… and they might be getting exactly that.
Australia’s economy shares a strong connection with China. This is known by most traders, but how to use that knowledge? Currently, expectations that China and the US will settle on a lasting agreement are on the rise, which would likely fuel China’s currency prices.
US President Donald Trump also fueled those hopes, suggesting that he will make a historic announcement within the next few weeks. Just what this monumental announcement will be has political analysts speechless for now, but Asian market traders are speculating something big that could spill over and ignite a long overdue AUD price rise.
What to watch for
When it comes to forex, there’s more behind the price moves than just economy. Traders are now realising that the media can drive global sentiment. Just how the media presents the news makes all the difference, so be sensitive to the overall tone. If everyone cries "Buy!" at the same time, an upward move usually follows.
Keep your eyes on the AUD price charts and your ears open to hear which direction the news outlets of the world are taking. If the Aussie dollar is really going to rise, it will probably be preceded by a reoccurring positive theme on practically every financial news outlet in the world.
Trading the Aussie dollar
Put yourself in a position to start acting on opportunities. Make sure Exness can approve your signup as soon as possible so you can act quickly. You might not want to trade every day, but when there’s smoke, there’s usually fire. Trading a hot currency on the rise is always best when you catch the move early.
Find time to get familiar with the currency market, political influences, and how the media distributes information. Test your theories thoroughly with the Exness demo account. Try targeting currency pairs that are in the eye of the world media. Develop your skills and instincts risk-free, only then should you consider investing. With Exness, making the move to real money trades can be done with just a few clicks.
Be ready for the next big market move
Not sure how to get started? No problem. Follow this step-by-step guide.