Trading AUD/USD

Investing in the AUD v USD currency pair has been highly attractive to traders for years, due to its stability and correlation with popular commodities. If you want to trade using a short-term or long-term forecast of this FX rate today, our review below dives into the exchange rate history, some trading strategy tips and how to use technical and fundamental analysis on a live graph.

AUD/USD Trading Brokers

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    Pepperstone offers ultra-competitive forex spreads averaging 0.12 pips on EUR/USD in the Razor account, accompanied by a diverse portfolio comprising 100+ currency pairs - an extensive selection surpassing most competitors. Additionally, Pepperstone distinguishes itself by offering three currency indices (USDX, EURX, JPYX), not commonly found among alternative platforms. Pepperstone has now won our annual 'Best Forex Broker' award twice.

  2. XTB

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    XTB provides access to 70+ currency pairs with low spreads averaging around 1 pip on majors. The xStation platform offers an intuitive environment for forex traders with an excellent charting package encompassing 30+ indicators, plus a range of order types, catering to various strategies and risk management techniques.

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    CMC presents an extensive array of 300+ forex pairs characterized by tight spreads and rapid executions, surpassing the offerings of many competitors in terms of currency diversity. Forex indices also present a fairly unique and holistic way to speculate on the value of key currencies like the USD, EUR and GBP.

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    FXCC's key selling point is its forex trading conditions. ECN spreads come in as low as 0.0 pips during peak trading hours, while it supports a wider range of currency pairs than the majority of rivals with over 70 forex assets. Additionally, you have access to MT4, which was built specifically for forex trading and excels for its charting tools.

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    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.

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    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.

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    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.

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    Eightcap offers 50+ currency pairs in line with the industry average but trailing category leaders like CMC Markets with its 300+ currency pairs. However, Eightcap stands out with institutional-level spreads from 0.0 pips on major pairs like the EUR/USD, alongside low $3.50/side commissions. The broker also offers rich forex data to inform trading decisions, including key fundamentals, bullish/bearish indicators and a calendar that tracks key events in the foreign exchange market.

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    PrimeXBT offers forex trading on over 50 majors, minors and exotics with margin opportunities and zero commissions. The forex platform is fast, reliable and feature-rich based on our latest tests with 3 charts, 10 timeframes, and 91 technical studies - ideal for active trading strategies.

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    OANDA offers 68 currency pairs, which is above the industry average. You can speculate on majors, minors and exotics, with spreads from 0.8 pips on popular pairs. There are no commissions and leverage is available up to 1:200. Average execution speeds are fast based on tests, at 12 milliseconds.

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    FxPro offers 70+ currency pairs but no minors and stands out with its ultra-fast execution speeds and tight spreads averaging 0.45 pips on EUR/USD. Forex traders can also build test and deploy short-term trading strategies on the industry-leading MT4 software, with expert advisors (EAs) for algo trading.

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    Plus500 provides forex trading through CFDs, featuring narrow spreads across an impressive selection of over 60 currency pairs. During testing, spreads came in as tight as 0.6 pips on the EUR/USD, which is notably lower than many alternatives.

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    Trade a wide selection of 80+ currency pairs with spreads from 0.5 pips and industry-favorite platforms. City Index has 40+ years experience in forex trading with liquidity from tier-one banks.

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    Markets.com offers 43 major, minor and exotic currency pairs. The range is around the industry average, though spreads are fairly competitive, starting from 0.6 pips for EUR/USD. There’s also an excellent range of tools and education, including forex calculators and trading videos.

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    NinjaTraders supports the trading of popular currencies including the EUR/USD. The software also offers advanced features to streamline the trading experience, including complex order types like market if touched (MIT) and one cancels other (OCO).

  16. Axi

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    Axi’s 70+ currency pairs is its strongest market offering and beats out rivals like AvaTrade, which offers only 50+. Combine this with an elevated MT4 offering through the NextGen add-on, and Axi remains an excellent broker for forex traders.

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    IBKR presents an extensive range of over 100 major, minor, and exotic forex pairs, surpassing the offerings of nearly all leading alternatives, though not CMC Markets. Forex trading occurs over multiple platforms and boasts institutional-grade spreads starting from 0.1 pips and 20 complex order types, including brackets, scale, and one-cancels-all (OCA) orders.

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    IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.

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    Videforex offers trading on 35 currency pairs through leveraged CFDs with spreads from 0.1 pips. Alternatively, traders can use binaries to speculate on upward/downward price movements with payouts up to 98%. Integrated technical analysis, economic calendars, and market news, all available within the platform, help support FX trading decisions.

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    An above-average selection of 55 currencies are available with reasonable spreads averaging 0.9 pips on EUR/USD during peak hours. Aspiring traders can continuously hone their forex strategies by switching between demo mode and their live account any time, with full access to the broker's 100+ technical indicators.

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    Focus Option offers 22 forex pairs tradeable via binary options, including a selection of majors and minors. FX pairs are also available to trade with margin on Focus Option's mobile app, which offers high leverage up to 1:50 and spreads from 1 pip.

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    OspreyFX offers more than 50 major, minor and exotic currency pairs. Spreads start from just 0.1 pips on the EUR/USD and the broker provides a suite of forex trading education for beginners, including partnering with Forex Squad for fresh insights.

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    CloseOption offers binaries on 25+ forex pairs, including majors like EUR/USD and a few minors like AUD/JPY. Payouts vary by currency, with decent typical payouts of 75% for GBP/USD.

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    Amega offers an unusually large selection of currency pairs for an unregulated broker with 70+ forex CFDs, alongside up to 1:1000 leverage, zero commissions and competitive spreads from 0.8 pips. FX traders also have access to MT5 – the faster, more advanced version of MT4.

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    Errante traders can access 50+ forex pairs with leverage up to 1:500 (location dependant). The broker offers fast execution and tight spreads, especially to clients with VIP and Tailor-Made accounts.

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    Kwakol Markets offers a wider range of forex pairs than most competitors, with 90+ assets available. Users get fast execution speeds and competitive spreads through the ECN model. On the negative side, not all currency pairs are available on MT4.

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    Coinexx offers an excellent selection of 70+ major, minor and exotics currency pairs, presenting diverse opportunities with a forex calculator to aid trading decisions. It’s also one of a select few brokers to support forex trading on the ActTrader platform, alongside MT4 and MT5.

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    Ingot Brokers offers forex trading on a modest suite of 30+ currency pairs with raw spreads on the MT5 platform. There are also no restrictions on short-term trading strategies, including hedging, scalping and the use of Expert Advisors (EAs).

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    Trade a small selection of 25 major and minor pairs. Spreads from zero on the pro account, micro-lot trading, and very high leverage make up for the limited range of currencies. The MetaTrader software is also a well-regarded platform for forex trading.

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    Go long or short on over 50 currency pairs with spreads from 0.6 pips on EUR/USD. Traders can access interactive tools on the forex industry’s most popular software, MetaTrader 4, with customizable charts, one-click trading and Expert Advisors (EAs) for algo trading.

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    World Forex offers CFD and digital contract trading on 53 forex pairs, including EUR/USD and GBP/EUR. High leverage is available for CFDs, which can be accessed with competitive spreads on certain account types.

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    FinPros offers 80+ forex pairs, which is one of the more diverse offerings available. Traders benefit from ultra-low latency, MT5 support and very tight spreads and low commissions on the RAW+ account.

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    Trade 45+ major, minor and exotic pairs with deep liquidity and low latency. The ultra-tight spreads from 0.01 pips on raw accounts, competitive $7 or lower round-turn commissions and high leverage up to 1:500 will suit scalpers, who can trade without limits.

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    IQCent traders can access CFDs or binary options on 45+ forex pairs. CFD spreads start from 0.3 pips and binary options payouts are decent up to 95%. This is competitive compared to Pocket Option, for example, offering forex payouts up to only 81%.

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    Trade 50+ forex pairs including popular majors and minors with very high leverage available up to 1:1000. Gold, silver, palladium and platinum pairs with USD are also available.

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    RaceOption offers 25+ major and minor currency pairs on a no-frills, web-accessible platform with 30+ indicators and built-in copy trading opportunities for a hands-off investment approach.

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    Scope Markets offers 40+ major, minor and exotic currency pairs. Although the range is average, experienced traders can access very high leverage up to 1:2000. Additionally, the broker’s proprietary terminal delivers advanced analysis tools, including a live forex heatmap.

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    Trade 50+ forex pairs, including popular major, minor and exotic pairs. This is a decent selection, but traders will have a choice between the attractive MT4, MT5 or IRESS platforms and regulatory cover from ASIC. The VPS will also suit automated forex trading strategis.

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    Anzo Capital offers 45+ forex pairs including majors, minors and exotics with fast execution and spreads starting from zero. High leverage up to 1:1000 is available with a margin call at 80% and a stop out level at 50%.

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    I think the range of 60+ major, minor and exotic currency pairs is fairly competitive, especially with spreads from 0 pips in the Pro account. Experienced traders can also access high leverage up to 1:500 in the popular MT4 platform.

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    Rock Global clients can access 50+ currency pairs via CFDs with leverage up to 1:500, world class liquidity and fast execution on the MT4 or TWS platforms. The tight spreads from 0.9 with no commission are a particularly attractive feature.

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    VT Markets offers an average selection of 40+ forex pairs with up to 1:500 leverage. Forex spreads in the ECN account are highly competitive, starting from 0.0 pips, although the 1.2-pip minimum quotes in the Standard account are a little higher than the likes of Pepperstone or IC Markets.

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    Binary and OTC options can be purchased on 40+ currency pairs, with 55+ currency pairs available if you deposit $1000. Typical payouts are reasonable at 81% and the $1 minimum trade makes the broker accessible to new forex traders. There is also access to the MT4 and MT5 platforms for experienced forex traders.

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    Exinity offers 150+ forex pairs to trade on a very competitive ECN pricing model, with spreads from zero and low commissions of $4 per round turn. Traders can access the powerful MT4 and MT5 platforms and trade with no restrictions on popular trading strategies.

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    ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs. Trading takes place on the leading MT4 and MT5 platforms, which offer dozens of in-built technical tools for short-term forex strategies.

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    PU Prime clients can trade 40+ forex pairs via the MT4 and MT5 platforms with dynamic leverage up to 1:500. Spreads start from near zero on Prime accounts, which also charge a $7 commission per lot, and a zero-commission Standard account with wider spreads is also available.

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    With 100+ currency pairs including all majors plus many minors and exotics tradeable on the MT4 platform with 1:2000 leverage, SuperForex lives up to its name as a great choice for forex traders. The ForexCopy system is also useful for newer traders.

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    AdroFx's strongest offering is its 60+ currency pairs, which can be traded with very high leverage up to 1:500. The broker also offers competitive forex spreads starting from 0.4 pips and charges no commission. Additionally, traders have access to MetaTrader 4, which was built for forex trading and offers excellent support for technical analysis and algo trading.

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    Start trading on dozens of currencies at RoboMarkets with powerful analysis tools and pattern recognition technology. 35+ currency pairs are available with tight spreads from 0 pips and rapid market execution. You can also utilise the broker's forex news alerts and economic calendar.

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    Trade 7 major, 21 minor and 29 exotic forex pairs with high leverage and a choice between STP or ECN accounts. Support is available around the clock and the TradeLocker forex software is provided.

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    M4Markets offers 45+ currencies with zero pip spreads. The low latency and 30-millisecond execution speeds makes the broker a decent choice for forex traders. Additionally, there are no restrictions on trading strategies, including scalping.

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    MultiBank FX offers trading on 50+ major, minor and exotic currency pairs. Spreads are tighter than many competitors and the broker offers higher leverage than most alternatives. Automated trading strategies are also permitted.

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    I’m happy with Tradeview’s strong range of 60+ currency pairs spanning majors, minors and exotics with competitive spreads from 0 pips in the $1000 ILC account. Traders can choose from several platforms, but I was particularly impressed with the feature-rich Currenex platform which is designed specifically for currency trading.

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    Global Prime traders can access 48 forex pairs including majors, minors and exotics with tight spreads from 0.9 with no commission or from 0 with a $7 round turn. Forex is traded via the leading MT4 platform, micro lots are available and latency is low via a New York-based server.

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    Trade Nation offers over 30 of the most popular forex pairs with variable spreads. Traders can access a slick proprietary platform or MetaTrader 4, with real-time forex market updates and insights via 'Smart News'.

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    As well as a competitive selection of 55+ forex pairs, traders can access high leverage up to 1:300. You can also enjoy advanced analysis from Trading Central with easy integration into MetaTrader 4.

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    Traders can access a decent range of 60+ major, minor and exotic forex pairs through standard and ECN accounts with tight spreads from 0.5 and 0.0, respectively. Execution speeds are also faster than most competitors at 50ms, which will appeal to active forex traders.

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    4xCube offers 60+ currency pairs with competitive trading conditions. We like that all trading strategies are permitted including scalping and hedging.

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    ActivTrades offers its lowest fees in the forex department, with excellent spreads on majors like the EUR/USD from 0.5 pips and zero commissions, keeping pricing simple. Improvements to the ActivTrades platform, alongside access to the industry-leading MetaTrader 4, also give traders the tools they need to navigate the FX market confidently.

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    BlackBull offers 64 currency pairs with excellent pricing through its ECN accounts, with the Standard commission-free spread starting from 0.8 pips. BlackBull also ensures its rapid execution carries through to MT4, which still stands as the industry’s most popular platform with active forex traders.

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    RoboForex offers trading on 30+ currency pairs, trailing category leaders like Pepperstone with its 90+ forex assets. That said, the Prime and ECN accounts feature competitive average spreads of 0.1 pips on the EUR/USD. Additionally, with a minimum investment of $100, traders can utilize the CopyFX system to replicate the strategies of seasoned currency traders.

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    Swissquote offers trading on a huge range of forex assets, covering 80+ currency pairs. Spreads start from 1.3 pips with the Premium account and there are zero commissions. Micro, mini and standard lot sizes are available plus options contracts on major currencies.

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    SimpleFX provides a comprehensive selection of around 60 currency pairs, from majors like GBP/USD to exotics like CHF/PLN. Forex trading fees are competitive, averaging 0.9 pips on EUR/USD during testing, while MetaTrader 4, available on desktop, web and mobile, was built specifically for trading currencies online.

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    EagleFX provides opportunities to go long or short on over 50 forex pairs from majors to exotics, with competitive spreads as low as 0.1 pips. The broker offers the leading charting software, MetaTrader 4, which delivers a host of charting tools for traders, including 9 timeframes and over 30 indicators.

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    FXDD continues to offer a leading selection of 90+ currency pairs with ECN pricing. Spreads are decent, coming in at 0.4 pips for EUR/USD during testing. That said, these quotes aren’t as narrow as top competitors like Pepperstone.

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    Trade on 45+ majors, minors, crosses and exotics, with competitive pricing, ultra-fast execution and no requotes. Newer traders can access zero-commission trading. Experienced forex traders can operate with no trading restrictions and benefit from an ECN account and a VPS service.

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    FXTrading clients can access 70+ forex pairs with high leverage up to 1:500, fast execution averaging 80ms, excellent liquidity and spreads from zero. A good selection of minors and exotics are available as well as all the majors. New users can start trading forex in 4 easy steps.

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    With over 190 forex spot pairs, EZ Invest outperforms many rivals in terms of access to the currency markets. Users can also choose between desktop software, a webtrader plus a solid mobile app. On the negative side, spreads aren't the tightest on entry accounts.

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    Trade 50+ forex pairs via the MetaTrader 4 and MetaTrader 5 platforms with leverage up to 1:500, immediate execution, deep liquidity and tight spreads.

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    Fortrade offers 60+ currency pairs including a good selection of majors, minors and exotics. Trading takes place via MT4 or Fortrade's proprietary, low-latency terminal, and spreads on the USD/GBP pair average a reasonable 2 pips.

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    FP Markets stands out as an excellent option for forex traders, boasting a selection of over 70 currency pairs covering a wide range of currencies, especially since expanding its choice of exotics. With average spreads of just 0.1 on the EUR/USD in its Raw account, the broker provides competitive pricing for traders.

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    IronFX continues to offer a strong selection of 80 currency pairs. You can trade through the market-leading MT4 platform with a range of forex market research tools. That said, commission charges in the zero-spread accounts are high, starting from $13.50 per lot.

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    Trade 80+ major, minor and exotic forex pairs. This is a very competitive range of currency pairs with 50+ exotics to choose from, and traders will benefit from fast execution and support from extra features including a pip calculator. The MetaTrader 4 software was also designed for online forex trading.

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    NordFX offers a modest range of 30+ major and minor forex pairs. Disappointingly, there are no exotic pairs, though traders do benefit from tight spreads from 0.0 pips and low commissions from 0.0035% per side. It also provides insightful weekly forecasts covering key forex assets like EUR/USD.

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    HYCM offers 40+ forex pairs, with most available to trade on either the MT4 or MT5 platform. The maximum leverage on offer is 1:30 in accordance with regulations, and tight spreads start from 0.2 on the Raw account and from 1.2 on the commission-free Classic account.

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    Established in 2005, FXOpen is a multi-regulated broker that has attracted over 1 million traders. Designed for active trading, it provides access to a growing selection of more than 700 markets and supports high-frequency trading, scalping, and all forms of algorithmic trading using expert advisors (EAs).

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    Trade 45 major, minor and exotic forex pairs. This is an average range, but the broker offers attractive and very competitive tight floating spreads from 0.3. Useful features including a news feed set the broker apart from many rivals and can help plan forex strategies.

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    Hantec Markets offers a limited range of 30+ forex pairs – less than most top brands, including Pepperstone with 100+. That said, market execution is rapid based on tests, and spreads are competitive starting at just 0.2 pips. This, combined with access to the popular MT4 platform with 30+ technical indicators, ensures a relatively complete trading experience for short-term currency traders.

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    With 60+ currency pairs available, Dukascopy offers enough majors, minors and exotics to keep most forex traders happy. The broker also offers high leverage up to 1:100 – a good amount to see from a reputable and regulated broker. Currency traders have access to excellent software, including MT4 and JForex.

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    Speculate on popular currency pairs with flexible leverage up to 1:500 and zero-pip spreads in the GO Plus account. Commission-free trading is available with micro, mini and standard forex contract sizes.

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    Tier 1 liquidity on an impressive range of 189 currency pairs and spot metals, plus 130 forwards, from 0.4 pips.

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    Trade on 60+ forex pairs with no commission and competitively tight spreads from 0.6 on major pairs such as EUR/USD. This is a good selection of forex pairs and excellent pricing for commission-free trading, well below the industry average.

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    ThinkMarkets offers 46 currency pairs, which is around the industry average. Forex traders can benefit from tight 0.0-pip spreads for EUR/USD during peak market hours. Additionally, the ThinkTrader proprietary platform offers an impressive 125+ technical indicators - ideal for complex forex strategies.

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    FXTM stands out with a strong selection of over 60 currency pairs, surpassing many competitors like AvaTrade. It also stands out with its six currency indices for traders aiming to diversify their forex portfolios, while the ECN account offers ultra-competitive spreads starting at 0 pips on majors, along with low commissions of just $3.50 per lot.

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    Trade FX pairs with tight spreads & leverage.

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    easyMarkets offers 60+ major and minor currency pairs but no exotics. Forex traders will appreciate the access to the industry’s leading software MT4, paired with the broker’s fixed spreads from 0.7 pips on EUR/USD, offering a degree of price certainty.

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    Fusion Markets offers an excellent selection of 90+ currency pairs, providing a range of short-term trading opportunities. It continues to excel for its ultra-tight spreads from 0.0 pips and exceptionally low commissions of $2.25 per side. You also get access to leading forex software in MetaTrader 4.

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    Trade 24 forex pairs via binary options. Such a small range of currency pairs is not that unusual among binary options brokers, and BinaryCent's high payouts up to 95% compensate for the lack of range.

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    Trade 49 major, minor and exotic currency pairs with fixed spreads or ECN pricing with no dealing desk intervention and a low starting deposit. You can analyze the currency markets using the broker's in-house trading platform.

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    FXCM offers an average range of 40+ currency pairs, although there are no commissions and spreads are competitive from 0.78 pips for EUR/USD. The broker also offers 3 forex baskets covering USD, Yen and emerging markets benchmarks.

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    InstaForex's range of 100+ currency pairs is among the largest we have seen. ECN spreads are also available from 0.0 pips with zero commissions. Minimum deposits start from $1 making the broker accessible for beginners. You can also access market-leading forex analysis and insights.

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    Trade 200 CFD forex pairs with DMA pricing and tight spreads, ultra low latency and high leverage up to 1:1000. The range of forex pairs available and pricing model are among the most attractive in the African market.

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    Capital.com offer a long list of forex CFD pairs for trading. All have competitive spreads. The firm also ensures negative balance protection

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    Trade over 180 major, minor, and exotic forex pairs on the Trading 212 platform, featuring floating spreads and leverage up to 1:30. It’s important to note, though, that the forex broker has a history of adjusting margin requirements without providing adequate notice. As a result, CMC Markets is a better pick for forex traders with more currency pairs and a cleaner record.

Introduction To AUD/USD

The AUD/USD cross currency pair (also known as the ‘Aussie’) is the sixth most traded currency in the world. The pair indicates the exchange rate between the Australian Dollar (the base currency) and the US Dollar (the quote currency), showing how many units of USD are needed to purchase one AUD.

To understand the origins and popularity of the two traded currencies, an overview of the history of the Australian Dollar and US Dollar is explained below.

The Australian Dollar

The Australian Dollar (AUD) was introduced in 1966 to replace the pre-decimal Australian Pound. As of 2016, the AUD accounted for 6.9% of the world daily share, behind the US Dollar, the Euro, the Japanese Yen and the Pound Sterling.

Much like the New Zealand Dollar and the Canadian Dollar, AUD is known as a commodity currency. This is because Australia’s exports comprise mostly of raw materials such as metals, oil and agriculture.

The AUD is a popular currency to trade due to high interest rates set by the Reserve Bank of Australia (RBA). There is also good political and economic stability in Australia, plus limited government intervention in the foreign exchange market.

After the first few years of being pegged to both the British Pound and then the US Dollar, AUD was floated in 1983. After reaching its lowest ever value in 2001, the dollar recovered in 2009 before reaching parity with the US Dollar for the first time in 2010.

The AUD reached its highest ever value against the US Dollar in 2011, which was purportedly due to Europe’s sovereign debt crisis at the time.

The US Dollar

The US Dollar (USD) has been in circulation since 1775 by the Continental Congress and was formerly known as the Continental Currency. It wasn’t until 1785 when the new currency, the US Dollar, was issued.

In the 19th century, large silver deposits were discovered in Western United States, causing political controversy when the intrinsic value of silver in the coinage dropped. Some parties advocated switching to the gold standard, eventually leading to its adoption towards the end of the century.

However, after various influential factors including the World Wars and the Great Depression, the gold standard became too difficult to manage by the early 1960s. By the 1970s, inflation, caused by increasing prices of commodities and spending on the Vietnam War, led to the Dollar being worth less than the gold used to back it.

As a result in 1971, President Richard Nixon enacted the Nixon Shock, which cancelled the convertibility of the US Dollar to gold.

Trading AUD/USD: Pros & Cons

There are a few benefits and drawbacks to consider before you start monitoring price action and begin day trading on the AUD/USD.

Pros

  • High interest rates – The high interest rates set by the Reserve Bank of Australia (RBA) are some of the highest among industrialised nations. This indicates a potentially stronger currency, making AUD highly popular among traders.
  • Volatility – The price of AUD/USD moves sharply in the market, creating attractive volatility for traders. You can open up a basic price chart to see these movements in real-time.
  • Stability – Today, Australia is considered economically and politically stable, compared to some other nations. There is also relatively low government intervention in the forex market.
  • Trade relations – Australia’s strong trade relationship with China and the Asia region results in a positive correlation with some popular commodities. This includes gold, one of the most traded commodities.
  • Diversity – You can trade a range of AUD/USD instruments, including ETF products, futures, forwards and options.

Cons

  • Leverage – Whilst leveraged trading can maximise profits, it can also increase losses if appropriate stop loss and take profit measures are not in place.
  • Volatility risk – Frequent changes in volatile markets such as AUD/USD can occur in just minutes and therefore can cause as many losses as gains.
  • Liquidity – Although AUD/USD is a highly liquid currency pair, the forex market does experience periods of low liquidity, especially outside of certain market hours. As a result, brokers will often increase their bid/ask spreads.

What Factors Affect AUD/USD?

Australian Factors

The price of AUD/USD is heavily affected by decisions made by the Reserve Bank of Australia (RBA) and the Department of Finance, who decide on interest rates and other fiscal policies in the country.

Traders should also stay on top of economic data relating to Gross Domestic Product (GDP), which measures the performance of a country’s economy, as well as inflation indicators, including the Core Price Index (CPI) and the Production Price Index (PPI).

As the AUD is a commodity currency, make sure to also look out for the current trade balance, which represents the balance between imports and exports of all goods and services in Australia.

Some other financial assets will also affect the AUD/USD trading economics, including other currencies such as the NZD and JPY, as well as EUR/USD, GBP/USD, and USD/CAD. Aside from gold, AUD/USD can also be directly affected by iron ore and natural gas. Of course, stocks of the Australian Securities Exchange will also influence the direction of AUD/USD.

US Factors

Along with GDP and inflation indicators, traders should keep an eye on decisions made by the US government, such as statements made by the administration, new laws or fiscal policy. The Federal Reserve of the United States is also the best place to look for changes to interest rates and bank lending in cases of financial crisis.

Furthermore, the US is able to artificially create high global demand for the US Dollar, due to its status as a reserve currency. Reserve currencies are used to purchase commodities such as gold and oil, creating demand for that currency. For example, it is thought that China’s interest in attaining its own reserve currency for the Yuan will in turn decrease demand for US Dollars.

How To Trade AUD/USD

To develop an efficient trading strategy, understanding how to analyse the price action of AUD/USD is essential. Day trading on the AUD/USD currency pair can be exciting, but make sure to consider the below techniques before executing your scalping or breakout strategy.

Trading the AUD/USD pair on MT4

Trading the AUD/USD on MT4

Technical Analysis

The art of technical analysis using live online forex charts and graphs is a fundamental aspect of forex trading. Whether you’re focusing on a short-term or long-term outlook, technical analysis studies pip movements for both.

Real-time charts allow you to analyse historical prices and data on an hourly, weekly, monthly or yearly basis. Chart analysis therefore can help uncover price trends to make a prediction or forecast on future trends.

To make use of a current AUD USD price chart, you can explore a range of technical indicators, trendlines and other graphical objects on a standard candlestick or bar chart. Support and resistance levels are commonly used to determine the high and low points of price movements within a given time.

Support and resistance can also be used in conjunction with short-term or long-term moving averages, daily pivot points or Elliott Wave analysis. So whether you’re looking at price movements for the last week or the last year, these tools will easily indicate bullish or bearish trends when prices rally or fall.

Note that some indicators will work better on certain time frames. For detailed price analysis by the minute, for example, most platforms will offer 1 minute, 5 minute and 15 minute charts. However, you can also utilise 1-hour or 4-hour charts for a broader outlook.

Fundamental Analysis

As well as your live streaming charts, you can also forecast AUD/USD movements using fundamental analysis tools, which monitor economic, financial or political developments. These resources, tools and news outlets will release the latest regional news updates and analysis, as well as market sentiment and exchange rate chart predictions.

Sources such as Yahoo Finance, Bloomberg, Reuters, XE and Google Finance are excellent places to start. It’s also worth checking out any resources provided by your broker or trading platform, such as an economic calendar or an AUD vs USD news forum.

Some third-party tools can also provide invaluable exchange rate history analysis and commentary based on 1-year, 3-year, 5-year or 10-year charts. For currencies with a deep market history, you can also find 20-year and 50-year charts on some sources.

Automated Trading

If you’re short on time or want to diversify your AUD/USD strategy, you could also opt for automated trading techniques using Expert Advisors (EAs) or trading signals.

Expert Advisors are algorithmic trading robots which scan the markets for optimum conditions and trade on your behalf. There are thousands of EAs to choose from in the MetaTrader platforms, for example, each individually tailored for a specific asset or strategy.

Trading signals allow investors to subscribe to another provider within the platform and automatically copies the orders into their own account. This option isn’t for everyone, so it’s a good idea to check out the provider’s monthly success data and statistics before committing.

Correlation

Some currency pairs are intrinsically correlated with other pairs or assets, due to the relationship between the currencies and nations concerned. As such, correlations can be used to help traders avoid bad trades.

Perhaps the strongest correlation associated with AUD/USD is gold (XAU). Australia has a strong exports relationship with China and the Shanghai Stock Exchange and therefore has greater exposure to Asian economies than other nations.

As a result of this correlation, AUD vs USD tends to rise and drop with the price of gold, which is viewed as a safe haven against inflation. You can view this correlation easily by observing a live AUD/USD and gold chart.

Whilst gold has the most notable correlation with AUD/USD, some other currency pairs also share a positive relationship, including the USD/JPY and EUR/USD correlation. For example, if the price of EUR/USD decreases due to the strengthening of the Dollar, the price of AUD/USD will also decrease.

Risk Management

Before you buy or sell AUD/USD, it is essential to implement appropriate money management tools. Regardless of whether you’ve made a solid 1-month, 3-month or even 12-month forecast, there is no guarantee that you will profit from every trade.

Stop loss and take profit orders can minimise risk and protect open positions. A stop loss essentially pulls you out of a trade when the market moves against you, whilst take profit orders will lock in your closing price when a certain profit level is reached.

You can also use a risk/reward ratio to manage your expectations and determine the worth of a trade. The ratio compares the amount of money you are risking against the potential gain.

Session Times

Whilst you can trade forex pairs 24/7, there are ideal times to trade AUD/USD when daily volume and volatility peaks. Generally, the best time to trade the Aussie to USD is between 19:00 and 04:30 GMT.

Note that the trading hours available in your trading platform will depend on the timezone of your broker. Traders should also remember that brokers may increase the buy/sell spread outside certain market hours during periods of low liquidity.

Final Word On Trading AUD/USD

Before you open your live charts and start investing today, make sure you understand the historical average exchange rate of the USD to AUD pair and how to forecast prices on a live daily, weekly or yearly graphs. You can also analyse the AUD v USD exchange rate news today on Yahoo Finance or Bloomberg, for example, to get a good view of whether the price will be going up or down tomorrow, or even next week.

Find out more about forex trading.

FAQ

AUD/USD: What Does It Mean?

AUD/USD is a currency pair that represents the FX rate between the Australian Dollar and the US Dollar, meaning you need a certain amount of USD (the quoted currency) to buy one AUD (the base currency). AUD/USD is the sixth most traded currency in the world.

There are several reasons that traders are attracted to the AUD/USD pair, including its high volatility and liquidity, as well as the relative stability of the Australian economy and high interest rates. AUD/USD is also considered a commodity currency due to its strong trade relations with China and other Asian economies.

How Do I Trade AUD/USD?

The best way to day trade with AUD/USD is to use a combination of technical and fundamental analysis. Daily exchange rate history on a live streaming chart will provide a good AUD v USD weekly or yearly outlook and will enable you to forecast any future price trends. Today, some platforms will allow you to analyse prices over a history of 10 or 20 years, for example.

When Can I Trade AUD/USD?

Forex is a 24-hour market, though certain hours in the day are ideal for trading AUD against USD. The optimal time to trade the pair is between 19:00 and 04:30 GMT, when the daily range of volatility and volume is highest.

Is AUD/USD Good For Beginners?

AUD/USD is a good choice for beginners due to its liquidity and good conditions, in terms of both short-term and long-term trends. The pair is also very stable due to its strong dependency on popular commodities. You can always join a discussion forum or trading community for any AUD/USD trading tips.