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As one of the seven major currency pairs containing the US dollar, the AUD/USD offers high volatility and rich liquidity. To trade this currency pair, you must stay abreast of monetary policy, interest rates, and other market news to stay on top of trending currencies. Technical analysis is a crucial part of successful trading, including the use of real-time charts and news to identify bullish and bearish patterns. While choosing a forex broker, make sure to find one that caters to your individual needs.
The AUD/USD sees its greatest volatility on weekdays. The most active periods are Tuesday and Thursday, with a volatility of around 80 pips. Wednesday is also active, with volatility varying widely throughout the day. Intraday volatility on the AUD/USD currency pair spikes around 0:00-15:00 GMT, based on Australian economic data and US economic indicators. This volatility can be exacerbated if a key economic report is released.
Other important factors that influence the AUD/USD are trade relations. Although trade with U.S. and Asian nations affects this currency pair most, interest rates also affect this pair. Higher Australian rates make the Australian dollar more appealing, while a higher U.S. rate may change its attractiveness. So, keep an eye on the upcoming RBA policy announcements to understand when and where to trade the AUD/USD.
Other factors that affect the AUD/USD exchange rate include events related to the Federal Reserve. Eight times a year, the Federal Reserve releases interest rates and an accompanying rate statement. This gives traders an idea of what the Fed expects to do with its monetary policy. US economic data also affects the AUD/USD currency pair, including consumer confidence and trade balance. Additionally, the Federal Open Market Committee holds regular meetings and releases press conferences and forecasts.
Assume that Michael has AUD$1,500 to invest in the forex market. He opens a margin account with a forex broker with a leverage ratio of 1:100. This means that he can borrow up to 100 times the initial AUD$1,500 he deposited in his account, doubling his potential profit by one hundred times. After securing his broker's approval, Michael then purchases EUREUR120,000 for AUD$1,500.
The value of the Australian dollar is currently worth about 73 US cents for every US dollar. In forex trading, this currency can appreciate in value in relation to the US dollar and result in a net profit for the investor. In order to gain profits, you must know the bid and ask prices for the currency pair. The bid is the price that you need to buy the quoted currency and the ask is the price at which you want to sell it.
The AUD/USD currency pair is one of the most popular currency pairs in forex trading. AUD/USD is the pair that represents the amount of US dollars you need to buy one Australian dollar. During the Asian trading session, the volatility is particularly high, encouraging traders to make a profit on this currency pair. This pair is traded globally and is linked to the price of commodities and market risk sentiment. With the right strategy, you can take advantage of the low spreads and maximize your profits!
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