How to trade EUR/AUD
This pair is not very popular as its analysis is considered rather difficult. There are many fundamental factors to consider for two unrelated currencies. However, once you figure out what news and indicators to track, trading EUR/AUD will pay off.
Combine technical and fundamental analysis to increase your chances of success. The Australian dollar price has the main influence on the instrument rate. The value of the euro has less weight but significant events in the EU can also change the EUR/AUD price.
AUD Rates
The Australian dollar directly depends on the following indicators:
- The gold price, as Australia is the third largest supplier of this metal worldwide. As the price of gold drops, so does the AUD.
- Significant decisions of the Reserve Bank of Australia.
- Australia's GDP, 70% of which is in the service sector and 12% in agriculture and mining.
- Export level of gold, crude oil, natural gas, iron ore and coal.
- NZD price. The growth of the New Zealand dollar has a positive effect on the AUD as the economies of the two countries are closely related.
- Key economic indicators such as unemployment rate, inflation, etc.
EUR Rates
The value of the euro has less impact on the instrument's rate but don’t ignore the following indicators:
- The economy level in the Eurozone which depends mainly on the service sector and manufacturing. If there are strong economic disagreements between the EU countries, the euro may depreciate.
- Significant decisions of the European Central Bank.
- Sharp changes in the value of USD.
- Significant political changes in the territory of the European Union.
- Inflation, unemployment rate and other economic indicators.
Advantages of EUR/AUD
Despite the complexity of the analysis, this tool is worth adding to your portfolio for the following reasons:
- High volatility suggests significant profits.
- The political and economic situation in Australia is very stable which positively affects the exchange rate.
- Both central banks rarely deliberately influence exchange rates.
- EUR/AUD works well with common technical figures and candlestick patterns. Thus, you can trade on price action and base your financial decisions on clear trading signals.
If you are new to trading, gain experience on the more popular major pairs before switching to cross-currencies. When you start making consistent profits on USD trading, proceed to EUR/AUD and start making real money.