The Australian Dollar (AUD) has risen against the US Dollar (USD) following the announcement of trade balance data on Friday. It just outperformed economists’ expectations by a significant margin. According to the figures, the trade balance improved in September and remained around 12249 M, down from 15077 the month before.

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports indicate domestic demand. Trade Balance gives an early indication of net export performance. If a steady demand in exchange for Australian exports is, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

On the other side, the Nonfarm Payroll from the US Bureau of Labor Statistics showed today with the  531 K in October compared to the month before data of 312 K.

Nonfarm payrolls show the number of new positions generated in all non-agricultural businesses during the preceding month. Payroll fluctuations every month can be particularly volatile because of the close relationship between them and the Central Bank’s economic policy actions. In the next months, the number will be subject to a lot of scrutinies, which will likely cause volatility in the FX market. A high reading is generally beneficial (or bullish) for the USD and bad for the AUDUSD.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair on dips still appears to be a good strategy in the short to medium term.