AUD/USD Forecast Poll

How to Read the Forecast Poll charts

OVERVIEW

This chart informs about the average forecast prices, and also how close (or far apart) sit the numbers from all participants surveyed that week. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon. This distribution also tells if there is unanimity (or disparity) among participants.

Bias

Each participant's bias is calculated automatically based on the week's close price and recent volatility. Drawing from those results, this chart calculates the distribution of bullish, bearish, and sideways forecast prices from all participants, informing about sentiment extremes, as well levels of indecision reflected in the number of “sideways”.

Averages

By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by any outlier among the poll participants.

shifted price

In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price.

price change

This chart tracks the percentage change between the close prices. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages.

smooth average

This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.

min/max

Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility.

AUD/USD, THE “AUSSIE”

The AUD/USD pair tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). This currency pair is also known as the "Aussie". Together with the New Zealand Dollar and the Canadian Dollar, the AUD is a commodity currency, that is a currency whose country's exports are largely comprised of raw materials (precious metals, oil, agriculture, etc.).

The interest rates set by the Reserve Bank of Australia (RBA) have been among the highest of industrialized countries and the relatively high liquidity of the AUD has made it an attractive tool for carry traders looking for a currency with the highest yields. These factors made the AUD very popular among currency traders.

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUD/USD

The organizations and people that affect the most the moves of the AUD/USD pair are:

  • Reserve Bank of Australia that issues statements and decides on the interest rates of the country.
  • Australian Government and its Department of Finance that implement policies that affect the economy of the country.
  • The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar.
  • Fed, the Federal Reserve of the United States. The Fed controls the monetary policy, through active duties such as managing interest rates.
  • Currencies: This group includes the following currency pairs: EUR/USD, GBP/USD, USD/JPY, NZD/USD, USD/CAD, EUR/GBP and USD/CHF

FORECAST FOR 2023

The Australian Dollar is facing headwinds yet again against the US Dollar, as the central bank divergence theme is back in play in early 2023.

The US Federal Reserve (Fed) is expected to deliver further rate increases than previously expected while the Reserve Bank of Australia (RBA) is nearing the end of its tightening cycle.

In light of this, AUD/USD’s recovery from the last quarter of 2022, fuelled by China’s re-opening-led optimism, seems to have lost traction. Hawkish Federal Reserve expectations combined with renewed geopolitical fears surrounding the United States, Russia and China and the downward pressure on commodities prices could leave the Aussie pair vulnerable in the balance of this year.

Technically, AUD/USD is unable to find acceptance above the powerful resistance at 0.7070. Meanwhile, leading momentum indicators retain their hold in the bearish territory, suggesting that the AUD/USD pair is likely to remain a ‘sell on rallies’ trade in the 2023 year ahead.