Stocks and treasuries plunged in the first half of 2022 as inflation and recession fears rose. What can we expect in Q3? Here we look at the main themes set to drive the markets and how they could influence the different areas of the market.
The Australian dollar is commonly referred to as the Aussie. The AUD has grown in popularity over the past few years since it tends to have a higher yield than many other currencies in the developed markets, making it attractive for traders looking for yield. Additionally, it also tends to attract attention because of its strong links to commodities, as Australia is a large commodity exporter, and consequently their growing trade relations with Asia. As such, the AUD is also known as one of the major commodity currencies. AUD/USD is the most popular of the AUD crosses.
Price drivers
The Aussie can be influenced by several macroeconomic factors, such as the Reserve Bank of Australia (RBA) raising or lowering interest rates, GDP, employment figures, trade balance and inflation data. Rhetoric/comments from Australia’s central bank officials can also have a significant impact on the Aussie. The AUD/USD also tends to have a higher beta and is therefore more sensitive to rising or falling equity and commodity prices compared to other crosses. Consequently, traders will want to keep a close eye on the S&P500 in the US as well as the prices of gold and copper as they have a high positive correlation with AUD/USD.
Distance shows the difference between the pivot point and bid rate. It is calculated by subtracting the ask rate from the pivot point rate.
Bid
Ask
Daily
HIGH
LOW
Close
R3
R2
R1
S1
S2
S3
Weekly
HIGH
LOW
Close
R3
R2
R1
S1
S2
S3
Monthly
HIGH
LOW
Close
R3
R2
R1
S1
S2
S3
Understanding Pivot Points
Pivot points are used by traders as a predictive indicator and denote levels of technical significance. When used in conjunction with other technical indicators such as support and resistance or Fibonacci, pivot points can...Read More
