AUD USD Signal Today for Binary Options Trading

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AUDUSD, aussie pair is a very great currency pair to trade in binary options. Its market price movements are mainly dependent on the commodity markets and also China’s economy.

Trading A Currency Pair – AUDUSD

You may wonder why Chinese economy and not that of Australia. China has the second largest economy in the world and about a third of Australian exports go to China. Therefore, you expect that any monetary policy that China makes or any expansion or recession of Chinese economy will set the AUDUSD moving.

Also, looking at the commodities, Australia is a large producer of gold, iron, coal and other similar commodities. Therefore, any effect on the commodities results in a direct effect on the Australian economy. When the Australian economy is affected, then the Australian dollar also has to be affected.

When trading the AUDUSD, traders should note the following things out this currency pair:

  • The ‘aussie’ is a very volatile currency pair. This is because it is dependent on very many pieces of data. This dictates the expiration that traders choose to use when trading.
  • Traders should also keep a keen eye on the Chinese data such as the PMI, inflation, monetary policies and GDP, since the AUDUSD is largely affected by what goes on in the Chinese economy.
  • Traders also ought to closely monitor the decisions of the Central Banks of Australia and United States. The Reserve Bank of Australia (RBA) hold meetings on a monthly basis and the Federal Reserve in the US hold meetings after every six months.

Important Economic Releases To Watch In Australia

Australia exports most of its products to China. Therefore, the Australian economy is very much dependent on what goes on in the Chinese economy. Also, since is a big producer of commodities like iron, gold, copper, palladium and platinum, its economy is also very much affected by what happens to the commodity prices. Therefore, traders should closely monitor these two things: Chinese economy and the prices of the commodities, since they affect the Australian economy and hence the Australian dollar thus having an impact on the AUDUSD currency pair.

In addition to the above, there is also the Purchasing Manager Index (PMI) releases in three parts for each sector: construction, services and manufacturing. If the PMI release is above the level of fifty, then it indicates a rise of the specific sector and if the release is below fifty, it shows a recession or drop in that specific sector.

The other releases that are of great importance are the Gross Domestic Product (GDP) and the Employment data.

Also, traders should carefully watch the intervention of the Central Bank when it comes to the Australian dollar. An example is the recent dovish statement that was made by the Central Bank Governor concerning the Australian dollar while also providing the appropriate target values. The financial markets are picking this values as a guarantee.

Important Economic Releases To Watch In United States

Any time a currency pair is associated with the United States, traders have to keep in mind that US has the largest economy in the world and therefore it almost every economic news releases coming out of the US is of high importance.

The Federal Reserve, which is the Central Bank of United States, have a dual mandate. Therefore, the information about jobs, that’s both the Non-Farm Payrolls and the CPI (Inflation) are of great importance to traders.

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However, there are also other equally important economic news releases that have a great impact on the US economy. These include: Producer Price Index (PPI), Institute for Supply Management (ISM) both Manufacturing and Non-Manufacturing, ADP, GDP, which is released on a quarterly basis, Retail Sales and the Durable Goods Orders.

What To Expect From Economic Releases

After looking into the economic releases from both Australia and US which are likely to affect the AUDUSD, now lets look at what traders should expect from these releases.

Traders should brace themselves for a fast moving market especially when the Consumer Price Index (CPI), inflation, is being released. This is because this economic release makes the Central Bank to quickly act on the interest rates.

Also, traders should look forward to a very volatile market when the Reserve Bank of Australia (RBA) is making its interest rate decision and also during its meetings which it holds on a monthly basis so as to assess the situation of the Australian economy.

Just like any other large economy in the world, the RBA has a mandate of keeping the inflation level of the Australian economy at about 2%; but mainly below two percent. Therefore, traders should carefully watch the CPI, Inflation, since it comes from a very calculated move since the RBA must do all it can to meet its mandate.

Also, traders should look at the GDP.

Another thing is the Retail Sales which offer a clue on the Consumer strength since the spending of consumers is a great growth engine of an economy.

Also, the Federal Open Market Committee (FOMC) meets every six weeks to forward economic projections. It also holds press conferences after every two to three meetings. During these events, the United States dollar is greatly affected and therefore the AUDUSD is also affected as well.

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How to Trade AUD/USD? And Best Time to Day Trade the AUD/USD Forex Pair

The AUD/USD pair is an excellent currency to trade with especially in the binary options. China’s economy and commodity markets are the factors that determine the market price movements of the currency pair. The reason for the claim is that China’s economy is the second-largest in the globe. Besides approximately a third of Australian exports are destined to China.

Australia produces most of the iron, gold, coal and other related commodities. Therefore, any change in the economy has an impact on the Australian dollar. People should be aware of certain things while trading the AUD/USD currency pair. First, the currency pair is highly volatile due to its dependence on numerous data pieces. The factor determines the chosen expiration when trading.

The traders should be keen on Chinese data. The data includes monetary policies, PMI, GPS, and inflation. Besides, the traders are required to monitor the choices of the Central Banks of both the United States and Australia. The meetings are made after every six months by the Federal Reserve in the United States. On the other hand, the Reserve Bank of Australia has meetings each month.

The traders should also monitor the prices of the commodities and the Chinese economy. The two named factors are essential since they have a direct impact on the Australian economy. The Australian economy also has a great effect on the Australian dollar, a situation that impacts the AUD/USD currency pair.

The other factor to consider is the Purchasing Manager Index (PMI). The PMI is released for each sector in three parts. The sectors are services, construction, and manufacturing. For instance, when the PMI release is over the level of fifty, then the case is an indication of the increase in the specific sector. On the other hand, a PMI release less than fifty suggests a recession in the specific sector.

The intervention of the Central Bank on matters related to the Australian dollar is essential to be considered. The example is the new dovish statement established by the Governor of the Central Bank. The statement is regarding the Australian dollar and offers the best target values. Majority of the financial markets are utilizing the named values as the guarantee.

There are essential economic releases to watch in the United States. For instance, the biggest economy in the world is found in the U.S. Therefore, any economic news releases from the country are of great importance. The Central Bank of the United States acts as the Federal Reserve and has a dual mandate. Due to the reason, the news regarding jobs that are either CPI and Non-Farm Payrolls are vital to the traders.

There exist other important economic news releases that possess key effects on the economy of the United States. The examples are the Producer Price Index (PPI), GPS, ADP, and Institute for Supply Management that is both Non-Manufacturing and Manufacturing. The information is made available on a quarterly basis and retail sales.

When the inflation and Consumer Price Index (CPI) is being released, the traders need to be ready for a fast-moving market. The claim is due to the fact that the economic release force Central Bank to act quickly on the interest rates. Besides, there is a highly volatile market when the Reserve Bank of Australia s making decisions regarding the interest rates.

Best Time to Trade AUD/USD

The high volume and large daily moves are evident during the Australian working hours and on the active United States trading hours. Therefore, for the highest volatility, one should pay attention to day-trading between 00:00 and 02:00 GMT. The other ideal time to trade the currency pair is between 06:00 and 08:00 GMT. On the other hand, for most trade activity and volume, the appropriate time is between 12:00 and 17:00 GMT.

In summary, the AUD/USD is a great currency pair to day trade. The currency provides good profit besides rich volatility and liquidity. The Australian dollar is one of the seven major pairs. Due to the reason, the trader should have the knowledge of both the interest rates and monetary policy set by the RBC and Fed.

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