Commodity prices have been at levels not seen for a long time. The beneficiaries of these high prices are countries for which exports of raw materials are an important part of the economy. Australia is certainly one of them.  Raw materials have almost 80% share in export and reached the value of $200 billion in 2020.

Australia - export structure in 2020
Australia – export structure in 2020.The value of exported raw materials exceeded USD 200 bln

Iron ore prices increased by 50% this year compared to 2020. The average price in 2020 fluctuated around USD 100 per tonne, currently it is USD 153 per tonne. Coal has risen in price from USD 60 to USD 200 per tonne over this period. No wonder that, despite the strengthening dollar against most world currencies, the currencies of raw material exporters are doing well and the dollar is losing against them.

Tuesday’s decision by the RBA (Reserve Bank of Australia) to leave interest rates unchanged caused AUD to surge. But it was not the decision itself that was the fuel for the increases… Important was the message after the meeting in which there were clear announcements of polmon tightening aimed at limiting inflation.

Technical analysis AUDUSD

AUDUSD H4 – bearish engulfing pattern suggests a downward correction. However, it may be shallow and the pair will return to growths

Analyzing the AUDUSD currency pair from the technical side, we can see that after yesterday’s strong increases, corrective signals appeared. On the H4 chart, a bearish outside bar formation was formed. The price broke out of the formation yesterday and a downward divergence appeared on the MACD.

The probability of continuation of declines is very high, but we must take into account the above-described fundamental conditions and the strong upward trend that may limit declines to the nearest demand zone. There may be an opportunity to join the uptrend with a target of 0.7750.

The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
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