The AUD/USD is one of the most popular currency pairs among forex traders. The pair indicates the number of U.S. dollars needed to purchase an Australian dollar.
AUD/USD Binary Options Trading
As such, trading the AUD/USD currency is commonly known as trading the ‘Aussie’. The Australian dollar is also referred to as the Aussie and is the sixth most traded currency in the world.
Why trade the AUD/USD
Stability of the Australian currency
The Australian currency is one of the most stable in the world. Compared to other currencies such as the Japanese yen, the Australian dollar faces very little intervention from the government, making it quite attractive for forex traders.
Stable Australian politico-economic scene
The Australian dollar is highly sought after due to the relatively stable political and economic conditions in the country. As such, the currency does not succumb to high-risk volatility, as it is quite predictable.
The Australian dollar is exposed to the Asian market, making it a gateway to the robust global forex market. Traders look at the Australian dollar as a great way to diversify their forex portfolio.
Unorthodox currency movement
The AUD/USD typically moves in the opposite direction to the world economy, unlike other major currencies. In times of an economic downturn, traders seek to liquidate other major currencies. But, it times of stability, they seek the AUD/USD more, because the pair offers a more stable exchange rate.
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Type of available binary options for the AUD/USDThe common binary options contract types for AUD/USD are:
• Basic Call/Put options: You need to predict whether the price of AUD/USD will move up or down prior to the expiry time.
• Touch options: You are required to predict whether the price of AUD/USD will touch the given strike price prior to the expiry.
• In/Out: You need to predict if the price of AUD/USD will remain within a range of two strike prices
Possible signals for the AUD/USD
In the week starting July 1, the Aussie fell sharply from its 0.77 level to a six-year low of below 0.75. In the course of that week, the AUD/USD pair oscillated at a support level of 0.76 and a resistance of 0.75.
Technical analysis for the months between July and September shows that a resumption of a strong USD will put a dump on the AUD with a downside target level of 0.7325.
On July 6, 2015, the AUD/USD bounced back from its six-year low to trade at 0.7511, as Asian markets remain relatively stable amidst the Greek crisis. The pair maintained a resistance level of 0.7550 and a support of 0.7486.
Factors Influencing Exchange Value of the AUD/USD
Differences in interest rates: The differences between the interest rates issued by the Federal Reserve and the Bank of Australia will influence the AUD/USD exchange value. A stronger US dollar could see the value of the pair decline.
Relation with other currencies: The AUD/USD compares favorably with other currencies, especially the USD/CAD pair. Both the Australia and Canadian economies work in almost the same formant and thus have a positive correlation.
Import/Export: Australia’s economy largely depends on the import/export market. The performance of this market impacts on the Australian dollar. A strong export sector strengthens the Australian dollar against the USD and vice versa.Commodity prices: The value of the USD and AUD depends on commodities such as copper, crude oil, iron and gold. Any supply, demand and price shifts in the commodities market will impact the value of the AUD/USD as a pair and as separate currencies.