Understanding the Power of AUD Indicator
The Power of AUD indicator provides insights into the current strength of the Australian Dollar (AUD) against other currencies.
This tool calculates its value based on the closing prices of seven currency pairs that include AUD, making it a handy resource for traders.
Notably, this indicator is particularly useful for mean reversion strategies, helping you make informed trading decisions.
Let’s say you're analyzing the AUD/USD currency pair, where AUD is the base currency and USD is the quote currency.
To get started, add the Power of AUD indicator to your chart first, followed by the relevant indicator for the USD.
You’ll encounter two primary scenarios:
If the indicator curves are close together, it suggests a higher probability that the AUD/USD pair will move UP.
However, always consider the broader market context, such as support and resistance levels, before making a trade.
If the indicator curves are far apart, it indicates a stronger likelihood that the AUD/USD pair will move DOWN.
Again, remember to take into account the overall market situation, including key support and resistance levels.
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