Australian Dollar Looks Primed for Rally

Australian Dollar Looks Primed for Rally

Over the last few months, the Australian Dollar has been under pressure against the US Dollar.  This activity can be seen in the AUD/USD forex pair, which has fallen to roughly the 0.70 mark in recent weeks.  From the historical perspective, this is a somewhat extreme valuation as we have now moved away from the longer term market averages.  This is important to remember because it ultimately means that we would start to see some changes over the next few weeks in terms of the market value of the Aussie.

Currency Trends

If we do start to see changes in these longer term trends, it is likely we will start to see an upswell in the amount of activity that is associated with trades made in the Australian Dollar.  This activity is mostly monitored using the AUD/USD forex pair, and if you are looking to start trading in these areas yourself it is a good idea to read a large number of forex broker reviews in order to see which brokers are currently offering the best benefits for traders.

There can be many opportunities to be found when trading in currencies and if we start to see changes in the underlying valuations of the AUD, we can almost certainly expect changes in the number of exports that will likely flow in and out of the country this year.  In most cases, a weaker currency value is good for export markets as this means that Australian goods will be cheaper for foreign customers.  In contrast, a rising currency valuation tends to weigh on exports as foreign consumers look for cheaper markets elsewhere.

Chart View:  AUD/USD

Source:  DailyForex

In the chart above, we can see that the AUD/USD started to fall heavily last May but has started to stabilize in the months since last September.  This indicates that we will likely see the currency “form a base” and start to move higher in the coming weeks and months.  Of course, it can take some time to reverse a longer term trend, so traders will need to exercise some level of patience when dealing with potentially bullish valuation scenarios for the Australian currency.

There will likely be opportunities here both for individual traders and for market consumers as the changing currency valuation can have a significant impact on the ways many different assets are traded.