Aussie Dollar and the AUD/NZD the Ones to Watch
The Aussie dollar and AUD/NZD are the ones to watch right now. AUD shows relative strength. This cross pair highlights relational dynamics. Traders spot opportunities in commodity currencies.
Here in UK election day is almost here & we can expect reactions as soon as the exit polls start posting as well as the actual results. Heaven only knows what is going to happen. So far GBP has been fairly well behaved – moving more as a result of USD & EUR.
Meanwhile in Asia – AUD has employment data to contend with. On 4hr CSI we have seen the AUD pull back & is also showing the NZD as hugely oversold, but as mentioned many times before a currency can stay stubbornly over stretched for a considerable time. And in the case of the Kiwi where it is still falling on the weekly and daily charts it is likely to stay down on the 4 hr chart. Of course AUD/USD is the one to watch, but expect to see moves in the AUD/NZD cross with some interesting volume/price action now developing in the slower timeframes, and with the NZD ( the white line ) deep in the oversold region on the currency strength indicator to the left of the chart.
The VPOC volume point of control has yet to reflect a possible change in sentiment but should the current congestion phase of price action begin to build with the associated build in volume, then this will duly move to reflect the reversal from bullish to bearish in this timeframe.
Why These Stand Out
AUD benefits from risk sentiment. NZD ties to similar drivers. AUD/NZD reveals which is leading. Volume price analysis (VPA) confirms moves—high volume on upticks shows conviction in AUD.
Practical Trading Insights
Focus on AUD/USD or AUD/JPY alongside AUD/NZD. Extremes signal momentum. Quantum currency strength indicator ranks them clearly. Matrix shows cross strength. Anna Coulling’s VPA approach with Quantum tools spots these relational edges early.
Aussie dollar and AUD/NZD deliver watch-worthy action. Quantum indicators on MT5 or NinjaTrader make monitoring simple and reliable. Stay alert for commodity-driven opportunities.
Commodity Currency Trading Strategies
Commodity currencies—primarily the Australian Dollar (AUD), Canadian Dollar (CAD), and New Zealand Dollar (NZD)—are closely tied to commodity prices (e.g., AUD to iron ore/gold, CAD to oil, NZD to dairy). They behave differently from “safe-haven” currencies like USD, JPY, or CHF, often strengthening in risk-on environments and weakening during risk-off. Trading them profitably requires understanding correlations, sentiment, and timing.
Key Factors Influencing Commodity Currencies
- Commodity Prices: Direct correlation—rising oil boosts CAD, falling gold pressures AUD.
- Risk Sentiment: Risk-on (equity rallies) supports them; risk-off (flight to safety) weakens them.
- Interest Rates & Differentials: Higher yields attract carry trades.
- Economic Data: Exports, inflation, and central bank policy (RBA, BOC, RBNZ) drive moves.
Core Strategies
- Correlation Trading
- Trade the currency alongside its commodity. Long CAD if oil rises on volume confirmation.
- Example: AUD/USD often mirrors gold or iron ore. Use volume price analysis (VPA) to confirm—high volume on AUD upmoves with rising commodity prices signals strength.
- Carry Trade
- Borrow low-yield currency (e.g., JPY) to buy high-yield commodity currency (AUD).
- Best in low-volatility, risk-on periods. Unwind during risk-off (can cause sharp reversals).
- News & Event Trading
- Focus on commodity reports (e.g., OPEC for oil, USDA for dairy) or central bank decisions.
- Wait for volume confirmation post-news to avoid traps.
- Trend & Reversal Trading with VPA
- Use volume price analysis for timing. High volume on up candles in AUD pairs shows conviction (trend continuation).
- Reversals: Divergence (price new high on low volume) signals weakness. Quantum indicators like Currency Strength or Matrix highlight relational extremes.
- Relational/Intermarket Analysis
- Pair with safe-havens: Long AUD/JPY in risk-on; short in risk-off.
- Monitor USD index (DXY)—inverse correlation often.
Risk Management Tips
- Stops beyond key support/resistance (validated by volume).
- Position size small due to volatility.
- Avoid over-leverage in correlated events (e.g., oil shock hitting CAD).
Quantum Trading tools (currency strength/matrix on MT5/NinjaTrader) excel here—ranking commodities currencies relationally. Anna Coulling’s VPA confirms signals with volume, turning commodity volatility into consistent setups.
These strategies work across timeframes—daily for swings, lower for day trades. Test on the demo first. Commodity currencies reward patience and relational thinking.
Fundamental Forces Driving the New Zealand Dollar (NZD)
The New Zealand dollar (NZD), often called the “Kiwi,” is a classic commodity currency. Its value ties closely to global demand for New Zealand exports. Traders watch fundamentals for clues on direction. Volume price analysis (VPA) confirms reactions with volume conviction. Quantum indicators enhance relational insight.
Dairy Exports: The Primary Driver
New Zealand is the world’s largest dairy exporter. Milk powder, cheese, and butter dominate trade. Strong global demand (especially China) boosts NZD. Weak demand pressures it lower. Dairy price auctions (Global Dairy Trade) move markets.
VPA spots conviction—high volume on NZD upmoves during dairy rallies validates strength.
Interest Rates and RBNZ Policy
Reserve Bank of New Zealand (RBNZ) rates influence NZD. Hikes attract capital—higher yields support Kiwi. Cuts weaken appeal. Forward guidance matters. Hawkish tone lifts NZD. Dovish pressures it.
Quantum currency strength indicator ranks NZD on policy shifts.
Risk Sentiment and Global Growth
NZD thrives in risk-on environments. Equity rallies and growth optimism boost commodity demand. This strengthens Kiwi. Risk-off favors safe-havens—NZD weakens. China growth is key—major trading partner.
Other Influences
- Trade Balance: Surplus from exports supports NZD.
- Weather/Seasonal: Droughts hurt agriculture—NZD pressure.
- AUD Correlation: Often moves with Aussie dollar.
Trading NZD Fundamentals with VPA
Fundamentals drive direction. VPA confirms timing—high volume on moves shows real conviction. Low volume reactions warn of traps. Quantum tools on MT5 or NinjaTrader rank NZD relationally. Matrix shows commodity-linked flows.
Anna Coulling’s VPA approach turns NZD fundamentals into disciplined trades. Quantum indicators make spotting drivers reliable.
Dairy, rates, and risk shape the Kiwi. VPA with Quantum tools delivers the edge. Trade NZD with context and volume confirmation.
By Anna Coulling
Creator of Volume Price Analysis