SWING TRADING THE AUSSIE DOLLAR

In today’s discussion, we would like to show another one of our swing trading ideas which our clients are able to benefit from. It is the Aussie Dollar (AUD/USD) swing trading break out and that is a long-term swing trading opportunity.

All regular readers of our blog, you will know exactly what we look for before entering a position in the market and the reasons behind it. If you are new to this page please take the time to check out our trading methodology and strategies page as this will give you a clear insight into our swing trading forex strategies.

SWING TRADING AUSSIE LTA

Before we present any swing trading charts or reasons for this swing trade idea, we want you to understand that is important to know the market you are going to be swing trade. Therefore, you need to have a swing trading idea of what is going on in the economies of the countries of the currency pair you are going to trade. We call that studying the Fundamentals of a swing trading market.

SWING TRADING FUNDAMENTALS

In this particular case, we will talk about the AUD/USD and that should lead us to study two economies:

THE AUSTRALIAN ECONOMY

The Australian economy has experienced steady growth and enjoys low unemployment, contained inflation, very low public debt and a robust and established financial system. With an average growth of 3.5% per year, by 2012, Australia had experienced more than 20 years of continued economic expansion.

Demand from Asia

Demand for resources and energy from Asia, in special from China, has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs.

Australia and the global financial crisis

Australia was practically not affected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has been highly favored from a sudden surge in its terms of swing trade in recent years, originated from rising global commodity prices. The country is a significant exporter of natural resources, energy, food and its abundant and diverse natural resources attract high levels of foreign investment including extensive reserves of coal, iron, copper, gold, natural gas, uranium and renewable energy sources.

Let’s us show you, as an example, how the Australian labor market has been performing in the past few months:

Australia’s Employment Change:

Date                Actual              Forecast          Previous

17/08/2017     27.9k               19.8k               38.0k

20/07/2017     14.0k               14.4k               38.0k

15/06/2017     42.0k                  9.7k              46.1k

18/05/2017     37.4k                  4.5k              60.0k

13/04/2017     60.9k               20.3k                 2.8k

This indicator measures the change in the number of employed people during the previous month and traders are particularly interested in it because job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

As we can clearly observe, jobs creation in the Aussie Economy has been thriving lately with the actual figures released 2 and even 3 times more than the forecasted figure. That is a sign of a very strong and stable economy.

THE UNITED STATES ECONOMY

Well, what can we say about the most powerful economy on earth?

We started 2017 with signs of a very a promising year for the US and for the Dollar. Surprisingly, the Trump effect after the elections was somehow unexpected and it looks like the euphoria has now passed.

The overall picture for economic growth is well short of 4% which was the promise Trump made as a candidate, but it is getting closer to the moderate goal of 3% that he has set since taking office.

Trumps Election

Trump’s election and promises of massive tax cuts and infrastructure spending lifted expectations on Wall Street and among economists of faster growth. However, he has not been able to get his economic agenda through Congress. That means those expectations have been adjusted.

Just last month, the International Monetary Fund (IMF) lowered its U.S. growth forecast for this year and next because of “uncertainty” over the timing and size of Trump’s policies and the U.S. Dollar, which rallied after the election, has retreated sharply in recent months.

The Dollar Index

The Dollar Index, which measures the value of the US Dollar relative to a basket of foreign currencies, has dropped a staggering 1000 points and is swing trading at levels seen back in May/2016 when the actual rally, which culminated in the Trump Election bull run, started. The fate of the US Dollar is being decided as we speak. At these level, the Index is

At these level, the Index is a critical point and a breakout will set some momentum to the market which will mean money to those who know how, when and which market to swing trading. 

THE FUNDAMENTAL VERDICT

Now you are asking yourself, where are we going with all of that?

If you pay attention to the message here, we have a Fundamental diversion. US economy retreating and Australian economy thriving. Buy the Australian Dollars and Sell US Dollars. That is the message presented to us, to make it simple buy AUD/USD.

THE TECHNICALS

Believe it or not, technicals are the easiest part of swing trading and the one I enjoy the most.

Let’s show you these 2 charts of the Aussie with the Platinum Technical Analysis:

From the swing trading charts above we can see that Aussie has finally managed to break out its multi-year swing trade range (Ascending Triangle) and is now set into a Bullish momentum move. This is a buy and holds trade. It has the potential to make 100’s of pips if you learn the concept of buying and holding.

Find out how Platinum Traders, United Kingdom will swing trading the Aussie!

KEY TECHNICAL LEVELS ON AUSSIE:

• 8065 – Short-Term Selling level
• 7715 – Long-Term Buying Level
• 7160 – Short-Term Buying Level
• 7615 – Long-Term Buying Level
• 7505 – Short-Term Buying Level
• 7375 – Short-Term Buying Level

How to swing trading Strategy and become a profitable Aussie Trader.

By any chance, if you are a new trader and would like to learn how to swing trading forex, then sign up today to our 2-day free Foundation to Forex Swing Trading Course. We have just introduced this as in the last month we have had a lot of inquiries on learning how to swing trade. We can get you on the successful path of becoming a Financial Trader.

See you soon!

THE PLATINUM WAY

At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.

If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets. 

Download our free ebook to read about the various Trading Patterns that work in the Financial Market. Watch Trades of the Week Videos in our video gallery. Subscribe to Platinum’s Forex Newsletter.

Hopefully, you have enjoyed today’s article. Thanks for reading!

Have a fantastic day!

Nisha Patel

Live from the Platinum Trading Floor.