AUS/USD trade idea I show my fundamental and technical analysis of the aussie, assessing likely hood of an uptrend and locating a good entry point. Overview of the AUS/USD Considering Australia's largest export Is Iron ore, also being the largest iron Exporter in the world, the price of AUS/USD is highly reactive to iron Prices. The aussie recovered very quickly From the pandemic and from my indications Is at a point were it could continue its uptrend. I believe the currency pair could reach its Year high of 0.80. The more likely, short ish term, price I predict it Would reach is 0.76 a growth of 1.9%. Australian Interest rates Data- Reserve bank of Australia Australia could follow in monetary tightening policy's in which majors Such as the us and uk will adopt to relieve their balance sheets from QE. For now we should assume interest rates will stay low and not base our Trade of this as this swing would not be held for more than 3 months. AUS/USD and Iron ore Iron around this month shot up in demand due to the Beginning of the demand of steel recovering after 2020s 10% demand drop. Now we are seeing a rising demand In iron for the steel demand increase that will likely happen Again. As we know this of course positively correlates with the aussie. AUS currency valuation Developed nations dropped their demand for steel down around 10% 2020. demand for steel is seeing a recovery this year and is expected to increase to 4.1% by 2021 q4. This will increase demands for iron and coal which are Australia's top exports. As of this month China resumes growth in its steel output as the western nations increase demand and specifically automotive companies. The AUS will increase in value if: • steel demands continues rise causing Iron uptrend • Aussie exports continue to rise to the 50k level • Gas and coal continue in its demand increase • Interest does not decrease further than it is • No major news on political instability comes out Australian exports in billions Why_Australia _Benchmark _Report_2021.pdf.aspx (austrade.gov.au) Iron ore technical analysis AUS/USD technical analysis The Entry point for this swing trade would be a break above the support it is testing at the 0.747 level. It would be sensible to take profits around the 0.76 resistance band where their would be strong selling pressure. If price breaks above this resistance band then another swing trade could be a good idea due to strong aussie fundamentals as well. Entry Specifics The order I believe is best For this trade would be 2 lots (200k$/20per pip) as this would gain 1100 pips on tp which is a 2200$ take. If price action follows forecasts then Price breaking above the 0.760 resistance Band would be a good indicator of the uptrend Momentum continuing to this years high’s.
