My trade thesis on this pair:
Price has been consolidating in this triangle pattern for over 6 weeks now. Despite how strong the USD is, this pair has struggled to break down. This is mainly due to strong commodity prices. Commodities make up over 22% of Australia's exports. Historically, the S&P Commodities Index has been in line with the price of the AXY (Australian Dollar Index).
In light of commodity prices slowly coming down (including Gold and Oil), I expect the AXY to face some bearish pressure. Additionally, we have US Non Farm payroll and Unemployment Rate coming out this Friday. Providing that the USD reacts positively to the data releases, we will see AUD lose against the dollar.
Current Interest Rates:
US Real Interest Rate: 5.5% (Cash Rate) - 3.3% (Inflation Rate) = 2.2%
Australia Real Interest Rate: 4.35% (Cash Rate) - 3.6% (Inflation Rate) = 0.75
Current interest rate adjusted for inflation is on favour of the USD (2.2 >0.75)
Upside potential on this pair is limited even if we see it break to the upside.
Price has been consolidating in this triangle pattern for over 6 weeks now. Despite how strong the USD is, this pair has struggled to break down. This is mainly due to strong commodity prices. Commodities make up over 22% of Australia's exports. Historically, the S&P Commodities Index has been in line with the price of the AXY (Australian Dollar Index).
In light of commodity prices slowly coming down (including Gold and Oil), I expect the AXY to face some bearish pressure. Additionally, we have US Non Farm payroll and Unemployment Rate coming out this Friday. Providing that the USD reacts positively to the data releases, we will see AUD lose against the dollar.
Current Interest Rates:
US Real Interest Rate: 5.5% (Cash Rate) - 3.3% (Inflation Rate) = 2.2%
Australia Real Interest Rate: 4.35% (Cash Rate) - 3.6% (Inflation Rate) = 0.75
Current interest rate adjusted for inflation is on favour of the USD (2.2 >0.75)
Upside potential on this pair is limited even if we see it break to the upside.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.