By James McKee
The AUD is now twenty percent overvalued against the dollar, many speculate that this has to do with the rising value of gold and the fact that Australia is the world’s third largest producer of it. This twenty percent over value is something that will correct itself in the near future and is therefore definitely something to keep your eye on. This is not an overnight development but definitely something, which will come up in the near future in one way or another. Does this mean I’m telling you to bet against the Australian dollar in the short term? Certainly not, you really need to consider every angle on this pair and for now I would still bet against the dollar.
This would be a good time to utilize the tools of the trade by maintaining whatever system you currently have in place alongside quality software such as MT4. Currency values may change in a heartbeat but you don’t necessarily need to maintain that pace, instead watch this pair for trends. The lesson here is to be cautious with your money and don’t place all your eggs in one basket on this one without testing the waters, thoroughly.
I’ve been noticing a good deal of economic upheaval in Europe, America and Japan, any currency paired with the currency of these countries (from the majors anyway) is going to be showing some healthy pip spreads over the next couple weeks (I’m guessing 50 pips or so). Make sure to use every tool at your disposal to keep a handle on what’s going on in the Forex Currency Market and please whatever you do don’t jump the gun, this is not a time to be a cowboy. For all the new traders out there this is definitely a time when you need to develop your “sixth sense” when it comes to Forex and not just rely on charts and data alone. Sometimes all you are going to have is your intuition and if your trade does not perform the way you had hoped just remember that the market is not going anywhere.
That being said it is truly crucial that those of you out there who have not already learned the basics of Forex need to do so immediately. My earlier articles outline the basics but there is so much more to it. If this is truly your chosen career YOU need to make the effort and read until your eyes hurt, and then read some more. If nothing else always remember that there is a whole community of people on Forex forums and message boards who are there to give you a helping hand. Happy trading.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado with 5 years of experience in trading with an attitude of cooperation through education. It is vital to remain in the loop where new technologies are concerned, make sure to stay up to date on the latest developments and always make the most of your ability to utilize the best forex exchange rates as much as possible when trading!
