In many ways an extraordinary day – particularly for the AUD/USD which has posted a huge candle on the daily chart. In fact the three main USD pairs David & I follow, namely the EUR/USD/ GBP/USD & AUD/USD have all ended in positive territory – with the Aussie the clear leader!!
All three have, of course, benefited from relentless USD selling, and for a view of whether this is set to continue we will have to wait for tomorrow’s advance GDP release and also the FOMC. The USD is certainly over extended on the medium term time frames (30 and 60 min) as can be seen on the currency strength indicator alongside the chart above. However, as we’ve seen with the Aussie today, a currency can stay over extended for very long periods of time. In the higher time frames there is still some room for the USD to fall even further. Indeed the monthly chart for the USD index is currently setting up a major two bar reversal – aka a shooting star candle
As we move into the US close and Asia – the focus is on the Kiwi where the ANZ Business Confidence number is due for release.
Commodities, China, and the Aussie Dollar: A Key Relational Link
The Australian dollar (AUD) is a classic commodity currency. Its value ties closely to raw material prices. No country influences this more than China. As the world’s largest commodity consumer, China demand drives AUD moves. Traders watch this relationship for clues. Volume price analysis (VPA) confirms conviction—high volume on swings shows real momentum.
China’s Role in Global Commodities
China consumes massive amounts of iron ore, coal, copper, and LNG. Australia supplies much of it. Strong Chinese growth boosts demand. Commodity prices rise. This supports AUD. Weak growth or slowdowns reduce imports. Prices fall. AUD weakens.
VPA spots reactions—high volume AUD rallies during China data beats validate strength.
How This Impacts the Aussie Dollar
AUD reflects China’s health:
- Strong Demand: Infrastructure or manufacturing booms lift commodities. AUD strengthens vs USD or JPY.
- Weak Demand: Slowdown or policy shifts pressure prices. AUD falls.
- Risk Sentiment Link: China optimism = risk-on. AUD gains with equities.
Quantum currency strength indicator ranks AUD live on China news. Matrix shows relational extremes vs commodity peers (CAD, NZD).
Trading the China-Commodity-AUD Link
Watch Chinese data (PMI, GDP, trade balance). Strong figures = bullish AUD bias. Weak = bearish. VPA confirms—high volume on moves validates direction. Low volume spikes warn of traps.
Quantum tools on MT5 or NinjaTrader make spotting impacts reliable. Trend Monitor aligns momentum.
Commodities and China drive the Aussie dollar profoundly. This relational link creates predictable setups. VPA with Quantum indicators delivers the edge. Trade AUD with China context and volume confirmation.
China’s Commodity Demand Trends in 2026
China remains the world’s largest commodity consumer. Its demand shapes global prices. In 2026, trends show stability with shifts toward green metals. Overall consumption moderates amid slower growth (~4.5-4.8% GDP). This influences commodity currencies like AUD and CAD.
Key Commodity Trends for 2026
Forecasts indicate mixed demand:
- Iron Ore and Steel: Stable to slightly lower. Steel demand ~837 million mt (down from 860 mt in 2025). Imports hold or rise modestly (~36-38 mt more shipments).
- Oil: Flat to slight growth (~1% demand increase). Surplus supply pressures prices.
- Copper, Aluminum, Lithium: Stronger—driven by EVs, renewables, AI infrastructure. Robust industrial uptake.
- Overall: Moderate consumption. Potential oversupply in traditional commodities. Green metals lead gains.
Risks: Policy uncertainty, trade tensions, or slowdowns could weaken further.
Impact on Related Currencies
China’s demand ripples to commodity currencies:
- AUD: Iron ore/coal ties—stable demand supports. Weakness pressures lower.
- CAD: Oil-linked—flat demand caps upside.
- NZD: Indirect via growth sentiment.
Volume price analysis (VPA) confirms—high volume on AUD/CAD moves during China data validates conviction.
Quantum currency strength indicator ranks these live. Matrix shows relational flows.
Trading Insights
China’s shift to green commodities favors copper/lithium plays. Traditional (steel/oil) stable but surplus risks. VPA spots real moves—high volume on commodity rallies confirms demand strength.
China’s commodity demand trends moderate in 2026. Green metals rise. Traditional stable. Quantum tools with VPA deliver the edge for related trades.
By Anna Coulling