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AUD/USD: Trading the Australian trade March 2015

Australian  Trade Balance  is closely linked to currency demand and is a key indicator. A reading which is higher than expected is bullish for the Australian dollar.

Here are all the details, and 5 possible outcomes for AUD/USD.

Published on Thursday at 00:30 GMT.

Indicator Background

Australian  Trade Balance is  measures the difference in the value of imported and exported goods on a monthly basis. An unexpected reading can  have a significant  impact on  the movement of AUD/USD.

In January, the trade  deficit ballooned to A$-0.98 billion, compared to A$-0.44 billion a month earlier. The estimate stood at A$-0.94 billion. The markets are expecting the downward trend to continue, with an estimate of A$-1.25 billion for the February report.

Sentiments and levels

The Aussie has struggled in 2015,  and  could be in for more trouble.  US data is expected to improve after some weak numbers last week, and monetary divergence will continue to weigh on the Australian currency. So, the overall sentiment is bearish on AUD/USD towards this release.

Technical levels, from top to bottom: 0.7978, 0.7799, 0.7692, 0.7601, 0.7403 and  0.7283.

5 Scenarios

  1. Within expectations: A$-1.40 billion  to A$-1.10 billion. In such a scenario, the AUD/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations:  A$-1.09 billion  to A$-0.95 billion: An unexpected higher reading can send  the pair  above one resistance line.
  3. Well above expectations: Above A$-0.94 billion: The chances of such a scenario are low. Such an outcome could push AUD/USD upwards, and a second resistance line might be broken as a result.
  4. Below expectations: A$-1.55 billion to A$-1.41 billion:   A reading short of expectations could push the pair below one support level.
  5. Well below expectations:  Below A$-1.55 billion. In this scenario, AUD/USD could break  below a second support level.

For more on AUD/USD, see the Australian dollar forecast.

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Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.